• Notes from The Desk | CAD CPI - It's All About The Base April 18 2023

Notes from The Desk | CAD CPI – It’s All About The Base April 18 2023

Notes From The Desk: CAD CPI – It’s All About The Base


Inflation continued to decelerate in March, meeting consensus expectations.


  • Annual CPI fell from 5.2% to 4.3% as lower energy prices more than offset higher mortgage costs and food prices.
  • While the drop in the headline number was significant, the year-over-year data is compared to March 2022, when oil was around $115. (c. $80.50)
  • The Bank of Canada’s (BoC) preferred core measures also slowed but remained well above their 2% target.
    • CPI Median: 3.6%
    • CPI Trim: 3.3%




  • While the BoC will be happy to see headline CPI decelerating as forecasted, core inflation remains well above target.
  • Today’s data allows the BoC to remain on hold; however, the conditions for rate cuts remain elusive as tight labour markets skew the risk towards inflation persisting above the target level.
  • Interest rates are largely unchanged, as yields have risen in recent days as the bond market moved to price in only a small chance of a rate cut late this year.
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