The odds of further rate hikes from the Bank of Canada shrink dramatically after consumer price index cools
Canada’s inflation rate cooled more than expected in September to an annual pace of 3.8 per cent in a broad-based easing that economists say should give the Bank of Canada reason to hold interest rates when it meets next week.
The reading released by Statistics Canada on Oct. 17, was the first slowdown in the consumer price index since prices reaccelerated in July and August and came in lower than economists’ estimates of four per cent.
Inflation slowed in a number of categories including cell services, cleaning products, furniture/textiles and recreational vehicles, BMO economist Benjamin Reitzes said in a note.
Food prices also showed signs of easing, rising 5.8 per cent year over year compared with 6.9 per cent in August.
CPI is still riding well above the Bank of Canada’s two per cent inflation target, but today’s numbers showed that higher interest rates are starting to do their job, said Andrew Grantham of CIBC Economics.
“There were signs within today’s release that the weakening of domestic demand is now starting to impact pricing in some areas and should continue to do so moving forward,” Grantham said.
Here’s what the economists are saying about the latest inflation numbers and what they mean for the Bank of Canada and interest rates.
“With the Business Outlook Survey pointing to ongoing struggles for the economy (which saw GDP flat-line in the six months to July), and inflation coming in below expected, look for expectations to solidify around the BoC holding policy steady next week. The level of inflation remains much too high for comfort, but the trend is the BoC’s friend here. Given that inflation is the most lagging of indicators, and the economy is clearly weakening, we’re likely to see ongoing disinflationary pressure…there’s no need for further rate hikes in Canada.”
“With today’s inflation print, the BoC is now equipped with all relevant data before making their policy decision next week. Alongside other measures that have shown momentum in cooling in Canada’s economy, we see enough evidence for the BoC to stand on the sidelines next week, holding the policy rate at five per cent.”
“With gasoline prices falling so far in October, in contrast to a sharp acceleration seen during the same month a year ago, headline inflation should ease further next month and print close to the upper bound of the Bank of Canada’s one to three per cent target range. Even though the Bank’s core measures of inflation remain too high for their liking,
some of the details within today’s report, combined with the stall in economic activity seen during Q2 and Q3, should give policymakers comfort that inflation will continue to ease back to two per cent without the need for further interest rate hikes.”
“The larger-than-expected falls in headline and core inflation in September should be enough to finally persuade markets that there is little chance of the Bank of Canada raising interest rates again in this cycle.
“The September CPI release at least confirms that the earlier surge in core inflation was a blip and reinforces our view that the Bank’s next move is likely to be an interest rate cut.”
“After taking a worrying hiatus in July and August, the disinflationary process looks like it is back underway in Canada. Markets got the message immediately, repricing the odds of a November rate hike from nearly 50 per cent down to below 20 per cent in the hour after Statistics Canada’s data on inflation was published. Along with the global tightening in long rates, this print gives the Bank of Canada a window to allow the lagged impact of interest rate hikes to dampen demand and continue the disinflation process without maintaining an aggressive tightening bias. But, with recessionary pressure building across the economy, the central bank should begin to weigh the risks of staying tight for too long.”
“The slower increase in Canadian consumer prices in September was a step in the right direction. It was also long overdue, given persistent signs of cooling in labour market conditions as well as in consumer spending data. Yesterday’s release of the Bank of Canada quarterly business and consumer surveys further highlighted softening sentiment among both businesses and consumers in Q3, with both groups acknowledging that further slowing in spending and growth can be expected in quarters ahead. Indeed, the lagged impact of interest rate hikes to date will continue to exert downward pressure on consumer spending as debt payments rise as a share of household incomes, making it more challenging for businesses to raise prices as fast and as frequent. With more easing in inflation readings expected in the months ahead, we expect the Bank of Canada to stay on pause through the rest of the year.”
“We think the September data will take a lot of pressure off the Bank of Canada to do more.
“It would be perilous for the Bank of Canada to remain focused on sticky inflation with real policy rate the most restrictive since 2008, given the lag in transmitting monetary policy to the economy, and even longer for inflation.”
Montreal Alouettes wide receiver Tyson Philpot has announced he will be out for the rest of the CFL season.
The Delta, B.C., native posted the news on his Instagram page Thursday.
“To Be Continued. Shoutout my team, the fans of the CFL and the whole city of Montreal! I can’t wait to be back healthy and write this next chapter in 2025,” the statement read.
Philpot, 24, injured his foot in a 33-23 win over the Hamilton Tiger-Cats on Aug. 10 and was placed on the six-game injured list the next week.
The six-foot-one, 195-pound receiver had 58 receptions, 779 yards and five touchdowns in nine games for the league-leading Alouettes in his third season.
Philpot scored the game-winning touchdown in Montreal’s Grey Cup win last season to punctuate a six-reception, 63-yard performance.
This report by The Canadian Press was first published Sept. 12, 2024.
The Canadian Press. All rights reserved.
NAPA, Calif. (AP) — David Lipsky shot a 7-under 65 on Thursday at Silverado Country Club to take a one-stroke lead after the first round of the Procore Championship.
Winless in 104 events since joining the PGA Tour in 2022, Lipsky went out with the early groups and had eight birdies with one bogey to kick off the FedEx Cup Fall series at the picturesque course in the heart of Napa Valley wine country.
After missing the cut in his three previous tournaments, Lipsky flew from Las Vegas to Arizona to reunite with his college coach at Northwestern to get his focus back. He also spent time playing with some of the Northwestern players, which helped him relax.
“Just being around those guys and seeing how carefree they are, not knowing what’s coming for them yet, it’s sort of nice to see that,” Lipsky said. “I was almost energized by their youthfulness.”
Patton Kizzire and Mark Hubbard were a stroke back. Kizzire started on the back nine and made a late run with three consecutive birdies to move into a tie for first. A bogey on No. 8 dropped him back.
“There was a lot of good stuff out there today,” Kizzire said. “I stayed patient and just went through my routines and played well, one shot at a time. I’ve really bee working hard on my mental game and I think that allowed me to rinse and repeat and reset and keep playing.”
Mark Hubbard was at 67. He had nine birdies but fell off the pace with a bogey and triple bogey on back-to-back holes.
Kevin Dougherty also was in the group at 67. He had two eagles and ended his afternoon by holing out from 41 yards on the 383-yard, par-4 18th.
Defending champion Sahith Theegala had to scramble for much of his round of 69.
Wyndham Clark, who won the U.S. Open in 2023 and the AT&T at Pebble Beach in February, had a 70.
Max Homa shot 71. The two-time tournament champion and a captain’s pick for the President’s Cup in two weeks had two birdies and overcame a bogey on the par-4 first.
Stewart Cink, the 2020 winner, also opened with a 71. He won The Ally Challenge last month for his first PGA Tour Champions title.
Three players from the Presidents Cup International team had mix results. Min Woo Lee shot 68, Mackenzie Hughes of Dundas, Ont., 69 and Corey Conners of Listowel, Ont., 73. International team captain Mike Weir of Brights Grove, Ont., also had a 69.
Ben Silverman of Thornhill, Ont., had a 68, Nick Taylor of Abbotsford, B.C., and Roger Sloan of Merritt, B.C., shot 70 and Adam Svensson of Surrey, B.C., had a 71.
Lipsky was a little shaky off the tee for much of the afternoon but made up for it with steady iron play that left him in great shape on the greens. He had one-putts on 11 holes and was in position for a bigger day but left five putts short.
Lipsky’s only real problem came on the par-4 ninth when his approach sailed into a bunker just shy of the green. He bounced back nicely with five birdies on his back nine. After missing a 19-foot putt for birdie on No. 17, Lipsky ended his day with a 12-foot par putt.
That was a big change from last year when Lipsky tied for 30th at Silverado when he drove the ball well but had uneven success on the greens.
“Sometimes you have to realize golf can be fun, and I think I sort of forgot that along the way as I’m grinding it out,” Lipsky said. “You’ve got to put things in perspective, take a step back. Sort of did that and it seems like it’s working out.”
Laird stayed close after beginning his day with a bogey on the par-4 10th. The Scot got out of the sand nicely but pushed his par putt past the hole.
Homa continued to have issues off the tee and missed birdie putts on his final four holes.
___
The Canadian Press. All rights reserved.
GUADALAJARA, Mexico – Canada’s Marina Stakusic is moving on to the quarterfinals of the Guadalajara Open.
The Mississauga, Ont., native defeated the tournament top seed, Jelena Ostapenko of Latvia, 6-3, 5-7, 7-6 (0) in the round of 16 on Thursday.
Stakusic faced a 0-4 deficit in the third and final set before marching back into the match.
The 19-year-old won five of the next six games to even it up before exchanging games to force a tiebreaker, where Stakusic took complete control to win the match.
Stakusic had five aces with 17 double faults in the three-hour, four-minute match.
However, she converted eight of her 18 break-point opportunities.
This report by The Canadian Press was first published Sept. 13, 2024.
The Canadian Press. All rights reserved.
Lawyer says Chinese doping case handled ‘reasonably’ but calls WADA’s lack of action “curious”
RCMP say 3 dead, suspects at large in targeted attack at home in Lloydminster, Sask.
Hall of Famer Joe Schmidt, who helped Detroit Lions win 2 NFL titles, dies at 92
Bad weather and boat modifications led to capsizing off Haida Gwaii, TSB says
Nova Scotia adopts bill declaring domestic violence in the province an epidemic
Canadanewsmedia news September 12, 2024: Air Canada pilot strike looms, BC transit strike talks resume
Shapovalov, Auger-Aliassime lift Canada over Finland 3-0 in Davis Cup tie
B.C. to scrap consumer carbon tax if federal government drops legal requirement: Eby
