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Statistics Canada released its latest inflation data last Friday and it showed our Consumer Price Index (CPI) growth slowing to 0.80% in April (as compared to 1.2% in March). Not surprisingly, this slowdown in year-over-year inflation was led by another 13.5% drop in energy prices, which followed a 10.4% decline for that category in March.
Stats Can also provides us with a more refined measure of inflation, which strips out volatile CPI inputs like food and energy, called core inflation, and momentum in this category also slowed to 2.3% in April (as compared to 2.4% in March).
The CPI data act as important gauges for anyone keeping an eye on Canadian mortgage rates because the Bank of Canada (BoC) will adjust its overnight rate, on which both of our variable and fixed mortgage rates are either directly or indirectly priced, to ensure that our economy maintains overall price stability.
With that in mind, here are my key takeaways from the latest CPI data, along with some other related thoughts as we look toward the BoC’s next policy-rate announcement this Wednesday: