Quote:
Originally Posted by The Fonz
August YOY CPI came in at 2.0%, after a 2.5% July, a 2.7% June, and a 2.9% May.
If this trend continues for another couple months, BOC is gonna get poopy pants and we'll see greater than 25bp cuts in early 2025, I'd guess.
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I actually wouldn't be surprised if we see a 50 bps cut this year. Mortgage interest inflation (which is dropping precipitously with rate cuts) is just about the only thing keeping it above the 1% bottom end of the target range.
That said, the downward trend likely won't continue, at least in the immediate future. August 2023 had extremely high inflation relative to its normal level for that month, so once that dropped out of the trailing 12 month figure, the annual number dropped a lot. Whereas the last 4 months of 2023 were pretty normal, so for the annual number to keep dropping, we'd have to have inflation that's well below normal from September to December.
The annualized rolling averages (seasonally adjusted) paint a picture that shows it being pretty steady for the last year, so I wouldn't be surprised to see inflation level off:
3 months: 2.01%
6 months: 2.40%
9 months: 2.02%
12 months: 1.95%