Canada's 2% Inflation Rate in August Raises Hopes for Large Rate Cut

• Canada's annual inflation rate reached the central bank's 2.0% target in August, data showed on Tuesday, fuelling hopes for a 50-basis-point interest rate cut by the country's central bank next month.
• The consumer price index posted its smallest rate of increase since February 2021 and the closely watched core price measures also cooled to their lowest levels in 40 months, Statistics Canada said. Consumer prices fell 0.2% on a month-on-month basis, it said.
• "We expect central bankers to slash their policy rate by 50 basis points next month in an effort to expedite the return to a more neutral setting," Royce Mendes, head of macro strategy at Desjardins Group, wrote in a report.
• The easing of price pressures was primarily helped by a drop in the prices of gasoline, telephone services and clothing and footwear, while shelter costs - mortgage and rents - continued to cool at a tepid pace as rents maintained their relentless rise.

(Source: Reuters)