From Yahoo Finance: 2025-05-20 08:35:00

Canada’s annual inflation rate dropped to 1.7% in April due to lower energy prices after the removal of a carbon tax. Core inflation increased, with two out of three measures hitting 13-month highs. Overall energy prices fell 12.7%, while groceries and travel tour prices rose. Analysts had predicted a 1.6% rate.

The Bank of Canada forecasted a 1.5% inflation rate, citing the carbon tax removal and lower crude prices. Gasoline prices fell by 18.1%, while natural gas dropped 14.1% year-over-year. Groceries increased by 3.8%, and travel tour prices rose by 6.7% in April. Month-over-month inflation decreased by 0.1%.

The Canadian dollar strengthened to C$1.3940 to the U.S. dollar after the data release. The odds for a rate cut decreased to 48%, down from 65%. The Bank of Canada will make its next interest rate decision on June 4, following the release of first quarter GDP figures on May 30.

Core inflation measures, like CPI median and CPI trim, rose in April. CPI median increased to 3.2%, the highest since March 2024, while CPI trim edged up to 3.1%, a 13-month high. The Bank of Canada closely monitors these core measures to gauge inflation trends and make informed policy decisions.



Read more at Yahoo Finance: Canada’s annual inflation rate in April drops to 1.7%, but core measures rise