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Macklem Just Raised the Inflation Alarm: What Monday’s CPI Means for Your Wallet

  Canadian Money Brief  |  Sunday, October 18, 2026  |  Written ahead of Monday’s 8:30 am ET inflation release Bank of Canada Governor Tiff Macklem has just told Canadians what the central bank is about to say on October 28: its inflation forecast is going up, and by a lot. The reason is oil. With the Middle East conflict dragging on, shipments still curtailed and refinery capacity damaged, he said the risk that inflation broadens and lingers has gone up. Speaking to reporters from Bangkok on Saturday, he framed the coming decision as a simple question: will inflation drift back toward 2% on its own, or does the Bank need to raise rates to nudge it there? Monday is the first real clue. Here is what is landing, what economists expect, and what it could mean for your gas bill, your grocery cart, your heating costs and your mortgage. 3.0% August CPI, year over year 3.2% September consensus (Reuters poll) 2.25% BoC policy rate, unchanged for nearly a year Oct 28 Rat...
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Canada’s Unemployment Rate Rises, Fueling Speculation of July Rate Cut

 

Canada’s unemployment rate has climbed for the third time in four months, reaching 6.2%. While the country added 26,700 jobs in May, the rising jobless rate has prompted economists to consider the possibility of a rate cut by the Bank of Canada. Here are the key points:

  1. Job Market Trends:

    • Canada’s labor market saw modest growth, but the unemployment rate edged up by 0.1 percentage point.
    • The unemployment rate has risen by 1.1 percentage points since April last year.
    • The involuntary part-time rate increased, signaling potential weakness in the economy.

  2. Bank of Canada’s Stance:

    • Governor Tiff Macklem hinted at further rate cuts if inflation progress continues.
    • The central bank is “not close” to the limit of divergence from the Federal Reserve.
    • Markets have priced in about a 58% chance of another rate cut next month.

  3. Economic Outlook:

    • While there’s evidence supporting lower interest rates, the economy hasn’t plummeted.
    • Expect a gradual pace of interest rate reductions this year, with cuts likely at alternate meetings.

In summary, Canada’s rising unemployment rate has put pressure on the Bank of Canada to consider a rate cut in July. Economists are closely monitoring the situation, and the decision will have implications for the Canadian dollar and bond yields. Stay tuned for further updates as the economic landscape evolves.


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