“Fed officials have said they want to see months of evidence that prices are cooling, especially in the core gauge,” Cooper said. “They’ll have another round of monthly CPI and jobs reports before their next policy meeting on Sept. 20-21.”
With a 50-basis-point increase in the US next month now becoming more likely than a 75bp hike, Canada’s latest CPI numbers – scheduled for release on Aug. 16 – will be a crucial guidepost for the central bank’s near-future policy stance.
Read more: Economists: Canada’s deceleration to last for a prolonged period
“If the data show a dip in Canadian inflation, as I expect, that could open the door for a 50bp rise (rather than 75bp) in the Bank of Canada rate when they meet again on September 7,” Cooper said. “That is particularly important because, with one more policy rate hike, we are…