Canada: Nowcast shows easing inflation that enabled BoC’s jumbo rate cut

With the threat of Donald Trump's tariffs hanging over the economy, the Bank of Canada cut interest rates by a half-point on Dec. 11. Officials likely saw room for this supportive move given that consumer prices are set to keep receding – an outlook that is backed up by CEIC's latest nowcast.

CEIC's machine learning-driven nowcasts let you "predict the present" for economic data that is only released with a significant time lag. Our Canadian inflation nowcast dashboard shows that inflation looks set to be stable at 1.9% for both November and December – below the Bank of Canada's target of 2%. (Official data will be released Dec. 17.)

Meanwhile, core inflation – which excludes volatile food and energy prices – will stay stable at 2.5% year-on-year in November.

CEIC users can use our dashboard to explore the factors influencing our nowcast model. Foreign-exchange and securities yields are important inputs at the moment.

Governor Tiff Macklem's central bank cut the key rate to 3.25%, bringing total reductions to almost 2 percentage points in a little over half a year - the most of any advanced economy. The Bank of Canada removed its previous explicit references for expectations of more easing, however – prompting some observers to dub the move a "hawkish cut."

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