The Bank of Canada lowered its key interest rate by half a percentage point last month in response to plummeting inflation. But it had acknowledged that price growth would likely jump back up after falling to 1.6%, making Tuesday’s report less of a surprise.
Forecasters like Porter who are expecting a quarter-point cut say Tuesday’s report solidifies that prediction.
He said a larger rate cut isn’t necessary given the economy is still chugging along and inflation is back up.
“The unemployment rate, at least for a couple months, has stopped rising, which is good news. An now we even get a little bit of a backup in underlying inflation today. And so I think the urgency to cut 50 (basis points) is really not there,” Porter said.
U.S. inflation also rose in October
In the U.S., inflation also ticked back up in October to 2.6%, up from 2.4% in September.
Chair Jerome Powell said last week that the U.S. Federal Reserve will likely cut its key interest rate slowly and deliberately in the coming months, in part because inflation has shown signs of persistence and the central bank officials want to see where it heads next.
Porter warned it would not be prudent for the Bank of Canada to go for a larger rate cut, particularly as the Federal Reserve signals it will be cautious.
The Bank of Canada will also have new gross domestic product data to consider as well as the November jobs report before its Dec. 11 announcement.
2.% + thispercent the previous month ++++! so how much for the year has inflation rose? Do we needto dig for gold? Eat bugs? Live in tent cities? No we need a volunteer type society without government Goven means control ment means the mind! Mind control needs to be done away with!