BMO Notes Core CPI in The U.S., Canada Closer to "Normal" Before Start of Iran Conflict

06:47 AM EDT, 03/12/2026 (MT Newswires) -- The United States consumer price index results for February had a bit of a "stale" news feel, given the spike in energy prices since then, said Bank of Montreal (BMO).

Still, the fact that core CPI was generally well-behaved at the start of the year is "constructive," noted the bank. The yearly rate eased to its slowest pace since March 2021 at just under 2.5% -- and a fraction of the 6.6% peak in September 2022. The six-month trend was a snick lower at 2.3% year over year.

Notably, while still above the 2% target -- for PCE deflator -- these core CPI trends are pretty much back to the top end of the range before the COVID-19 pandemic, stated BMO. In fact, core CPI in February 2020 (just before the lockdowns) was running at 2.4% year over year -- just one tick below the current pace, even taking it to a couple decimal places.

It's a broadly similar picture in Canada, where CPI excluding food and energy has calmed to 2.4% year over year, also matching the high end of the range before the pandemic, added the bank.

Not quite "normal", but almost there, it pointed out.

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