“The (Financial institution of Canada) is in a tough place,” Orlando mentioned. The central financial institution should resolve between responding to potential tariffs that would gradual financial development or specializing in persistent inflation dangers.
Regardless of inflation considerations, markets are nonetheless pricing in a 25-basis-point fee lower in March, although expectations softened barely after the brand new inflation knowledge was launched.
“There may be loads of time between now and March 12, and if the (US) president’s first few weeks are something to go by, so much may change earlier than then,” Orlando mentioned.
Capital economics: Inflation pressures may cease fee cuts
Stephen Brown, deputy chief North America economist at Capital Economics Ltd., mentioned January’s 1.9 p.c inflation fee was solely low due to the GST vacation.
He pointed to rising gasoline costs, up 8.6 p.c from January 2024, and better pure fuel costs, which climbed 4.6 p.c. Costs for brand new autos, family items, clothes, and footwear additionally elevated.
