My perspective on inflation
“Canadian headline inflation continues to move in the direction of the Bank of Canada’s 2% target, such that the BoC recently kept rates unchanged at 2.25%.
I don’t anticipate any radical change from here, allowing the BoC to remain on the sidelines, absent significant deterioration in terms of economic growth, be it resulting from trade tariffs or possibly further downside or concerns pertaining to the Real Estate space.
For 2026 as a whole, all eyes will be on CUSMA, and how the tariff wars evolve from here, which may alter my baseline view on inflation – particularly in the event our Loonie should come under pressure – but that isn’t my base case.”
The wild card in the near term is the impact of the conflict with Iran, with significant disruption potential. Its duration, hopefully short, should mitigate its negative impact, which otherwise, particularly in terms of energy prices, would represent an inflationary impulse negatively impacting transportation, manufacturing, and broader supply chains.
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