Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Explode! Canadian inflation fell to 2.3%, but restaurants collapsed. Can interest rates be cut to save the housing market?!
This article is reprinted from Canada News Network (public account ID: cacnewsca)
On Tuesday, Statistics Canada released its latest Consumer Price Index (CPI) report. The data shows,Canada’s overall inflation rate has fallen to 2.3%.Not only is it down from 2.4% in December last year, but it is also very close to the central bank’s 2% target.
Although the overall data is beautiful,But food and restaurant prices are still horribly high.
Food prices rose as much as 7.3% year-on-year in January. The price of eating in restaurants has skyrocketed by 12.3%. No wonder Canada has seen a large-scale wave of restaurant closures – neither owners nor diners can stand it.
Gasoline prices plummeted 16.7% year-on-year in January, becoming the “number one contributor” to lowering inflation.
To the house slaves’ relief, housing inflation, which has always been the most “stubborn”, has finally bowed its head——Housing price growth fell to 1.7% in January, the first time in the past five years that the indicator fell below 2%.
Faced with this report card, economists have lined up to give“A grade” praisebelieving that the door to interest rate cuts has officially opened.
Well-known analyst David Rosenberg bluntly said that this report is simply “excellent.”
In core data, a measure of inflation trends has fallen to 1.2%, the lowest level since May 2020. This means,Inflation has entered a “silk decline” track, and the central bank should now shift its focus from “preventing inflation” to “rescuing the economy.”
For the majority of families with mortgage loans, they can focus on the next interest rate meeting on March 18. The current market forecast for a mid-year interest rate cut has risen from 30% to 35%.
As Royce Mendes, head of macro strategy at Desjardins, said: “While we’re not ready to include any further rate reductions in our base case forecast just yet, it wouldn’t take much to force a change.”
Related reading:
