Canadian Banks See 3.2% CPI Peaking, Expect BoC to Hold 2.25% on July 15
Updated
Updated · Mortgage Professional · Jun 22
Canadian Banks See 3.2% CPI Peaking, Expect BoC to Hold 2.25% on July 15
3 articles · Updated · Mortgage Professional · Jun 22
Summary
RBC, BMO and TD said Canada’s 3.2% May inflation reading does not justify a Bank of Canada move on July 15, with all three expecting rates to stay at 2.25%.
Gasoline prices jumped 33.2% from a year earlier as the Strait of Hormuz closure constrained oil supply, driving the headline CPI rise to its highest level since December 2023.
Core inflation stayed subdued: the BoC’s trim and median measures averaged 2.1%, unchanged from April, while CPI excluding food and energy edged up to 1.6%.
TD expects May to mark this year’s inflation peak after oil prices pulled back on a tentative Iran-US ceasefire, though BMO flagged still-sticky food inflation, which accelerated to 3.8%.
For mortgage borrowers, the view reinforces expectations that variable rates will stay broadly unchanged through the rest of 2026 after the BoC’s fifth straight hold on June 10.