Bank of Canada Prepares for Oct. 28 Rate Decision Amid Key Data Releases
The Bank of Canada's next interest-rate decision is scheduled for Oct. 28, preceded by the release of September inflation data and quarterly surveys on Monday. RBC assistant chief economist Nathan Janzen expects inflation to hold near 3 per cent, driven by high gasoline prices, while the central bank weighs energy costs against signs of economic softness.
The Bank of Canada is preparing for its next interest-rate decision, scheduled for Oct. 28, as a series of key economic indicators are set to be released in the days leading up to the announcement.
On Monday, Statistics Canada will publish its September inflation data. RBC assistant chief economist Nathan Janzen expects the annual rate of inflation to hold steady at approximately 3 per cent for the month. Janzen attributes this anticipated stability largely to persistently high gasoline prices, which are influencing other parts of the consumer basket.
Also on Monday, the Bank of Canada will release its own quarterly surveys of businesses and consumers. These surveys are expected to provide insight into cost pass-through trends, including whether businesses plan to pass rising costs on to consumers.
The upcoming data arrives amid broader inflationary signals from south of the border, where U.S. producer prices recently jumped at their fastest pace in more than four years. Despite these external pressures, Janzen describes the Bank of Canada's Oct. 28 meeting as a "live" meeting where a rate hike is possible, though it is not his base-case scenario.
Janzen notes that higher energy prices would generally lead to broader future inflation pressures. However, he states that these risks are currently offset by disinflationary forces stemming from a weakening economy. The central bank is weighing potential inflationary pressures from energy costs against signs of softness in the labour market and the wider economy.