CIBC Says Canadian Government Bonds Are Little Changed After Higher-Than-Expected CPI

10:05 AM EST, 01/19/2026 (MT Newswires) -- Bond yields were little changed by Monday's consumer price index data, which did little to change expectations for Bank of Canada policy setting, said CIBC.

Headline CPI contracted 0.2% month-over-month non-seasonally adjusted (NSA), while rose 0.3% month-over-month seasonally adjusted (SA) and 2.4% year over year, with both of those readings slightly above consensus expectations, noted the bank.

The acceleration in the year-over-year rate was largely due to base effects from a year ago when the temporary GST/HST tax break lowered prices of some goods and services, pointed out CIBC. That impact was offset slightly by gasoline prices falling more in year-over-year terms than they did in the prior month.

Headline inflation may have been firmer than expected in December, but softness in measures such as CPI-Trim and Median suggests that wasn't due to widespread inflationary pressures, added the bank.

As a result, CIBC still views underlying inflation as only a little above 2% -- close to the 2.2% six-month annualized average of core measures -- which isn't strong enough to justify speculation that the Bank of Canada may be forced to raise interest rates before the end of the year.

The bank continues to forecast no change in the policy rate during 2026.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.