Canadian Core Inflation Questions Rate Cuts, Says Scotiabank

12:10 PM EST, 11/17/2025 (MT Newswires) -- The Canadian dollar (CAD and loonie) and government bond yields barely flinched when they saw the consumer price index data on Monday, said Scotiabank.

Headline was on consensus and the core gauges are a mixed grab bag of readings that, on balance, came in quite "warm," noted the bank. In fact, the suite of core measures suggests core pressures at the margin that question recent easing.

In any event, the Bank of Canada doesn't seem to know which measures of core inflation it's primarily interested in and so markets also have difficulty determining how the BoC would view the readings, stated Scotiabank. Regardless, the clear message from the BoC is that it is on a prolonged hold, barring major shocks.

Total inflation was up 0.2% month-over-month seasonally unadjusted (NSA) and 0.1% month-over-month seasonally adjusted (SA). The year-over-year rate eased to 2.1% from,m 2.4% mainly on shifting year-ago base effects.

The core inflation measures were highly dispersed, but three out of the four main ones were all rather warm, pointed out the bank. At SA and annualized rates, traditional core CPI (excluding food and energy) was up 3.1% and the prior month's reading was revised sharply higher to 3.1% from 2.3%.

At the opposite end was the weighted median CPI at 1.6%. In the upper middle of the range was the trimmed mean CPI at 2.8%. CPI excluding the eight most volatile items that used to be the BoC's preferred gauge was up by 3.8% for a second consecutive month.

The usual caution against using year-over-year measures for trimmed mean and weighted median CPI remains focused on how they aren't spot readings; they are rolling weighted month-over-month readings that are very slow-moving in response to recent developments. As such, the fresher month-over-month measures provide a better picture of inflationary pressures at the margin.

These aren't light readings on balance, added Scotiabank. The suite of them over recent months indicates that core inflation remains too persistently too warm to a) have eased of late, and b) for any further easing to be contemplated.

Inflation was driven by services again as goods price inflation remains tame, according to Scotiabank.

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