Nothing in October's CPI to Rekindle Bank of Canada Rate-Cut Hopes, Says Rosenberg Research

09:55 AM EST, 11/18/2025 (MT Newswires) -- Canada's consumer price index for October, released on Monday, showed little surprise for the markets -- up +0.2% month over month on a non-seasonally adjusted basis, said Rosenberg Research.

The year-over-year trend eased to 2.2% from +2.4% in September, though a tad above Street views of a 2.1% year-over-year print. The core median measure softened to 2.9% year over year from 3.1% -- it was 0.14% month over month for the lightest reading since July 2024 -- while the core-trimmed metric ticked lower to 3.0% from 3.1% (+0.2% for the sixth consecutive month).

Nothing here to move the Bank of Canada off the sidelines, where it stated at the last policy meeting that it intends to maintain for some time, stated Rosenberg Research.

On a seasonally-adjusted basis, the CPI was held to a small 0.1% month-over-month uptick and has come in at, or below, 0.2% sequentially in four of the past five months. Be that as it may, what will catch the eye of the hawks on the BoC council will be the fact that in each of the past two months, the core excluding food & energy index has risen nearly 0.3%, and the year-over-year trend remained stuck at 2.6% (it was +2.3% a year ago), noted Rosenberg.

Lower gasoline and food prices masked some pretty hefty increases in shelter, household operations, and recreation costs.

There was something for everyone in this inflation report, but one thing the policy hawks will likely point to is the fact that the CPIX, the most accurate measure of underlying inflation that strips out the eight most volatile items and the effects of indirect taxes, rang in at 0.3% month over month for the second month in a row in the highest back-to-back readings since the turn of the year, it added.

Rosenberg highly doubts that Governor Tiff Macklem will look too kindly at the fact that this closely monitored core index has seen its year-over-year trend accelerate from 2.6% in August to 2.8% in September and now to +2.9% in October -- this trend was running at +1.7% this time last year.

The fact is that the CPI excluding shelter and CPI excluding mortgage interest are both running close to the 2% BoC target. Both measures are now trending higher -- they were running far cooler at over 1.0% last spring.

When combining this report with the feel-good October employment release, which saw jobs expand nicely and the unemployment rate edge back down, it is going to take a whole lot of adverse economic news or a financial shock for the BoC to rekindle the easing cycle, according to Rosenberg.

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