1. Canada's inflation rate dropped to 2.8% in June, entering the Bank of Canada's target range for the first time in over two years. Lower gasoline prices contributed to the decline.
2. Grocery prices in Canada increased by 9.1% year-over-year in June, slightly faster than in May.
3. Core measures of inflation, which exclude volatile components, have not decreased as much as the overall rate. These measures are currently between 3.5% and 4.0%.
4. The Bank of Canada raised interest rates recently, expecting inflation to remain high for an extended period. It anticipates inflation to hover around 3% over the next year and gradually decline to 2% by mid-2025.
5. While overall inflation fell within the Bank of Canada's target range, the central bank aims to achieve a 2% rate. The rate hikes are intended to reduce demand in the economy by making borrowing more expensive. However, this has led to higher mortgage interest costs for Canadians.
In summary, Canada's inflation rate reached the Bank of Canada's target range, primarily due to lower gasoline prices. Grocery prices continued to rise, and core measures of inflation remained elevated. The Bank of Canada expects inflation to stay high and aims for a 2% rate. While the rate hikes aim to reduce inflation, they have led to increased mortgage interest costs for Canadians.