Seems the BoC is taking, in truly Canadian fashion, a very reasonable policy stance, with reasonably sized shifts since they bedazzled the world with that one 100bp raise last year.
why reasonable? lets stare at numbers turned into pictures
Lets start with Ye Olde Historicale Evidence’e
Here we see the average (mean) % change in CPI observed since 1914…
Say we eyeball 3 phases annually:
Flat opening quarter (we’re still coming out of Hibernation)
Spurt into Summer (now we’re going “up to the cottage” or maybe buying a boat, idk, Canadian things)
Trudge back to winter (we’ve sent our kids back to school and now we need to buy winter clothes, enjoy horror season, give thanks, and get ready for Christmas)
BoC rate decisions over 3 phases
wow, much delight. So coincidence.
Hibernation: hike
Summer: raise in the June (mid-year) meeting
Trudge: TBD…
Raise/Pause in Sept. (back to school times - but the last meeting until dec&jan)
Raise/Pause in Dec.
Finally, what actually happened with CPI so far this year
A surprise bump in April that was not in-line with historical norms. But we see a slightly different picture if we subtract energy…
I wouldn’t want to trade against the BoC. First they raised in Jan and then held fast into march and april even with rising inflation in Feb. Now they are front-running the inevitable summer month spending spree. Obviously the place is run by some wicked smart ppl.
Whether this is enough to keep inflation trending downwards….who knows, only time will tell. We are still dealing with a housing shortage, a labour shortage, and a massive dependence on food/energy/processed goods imports.
For posterity, here is US CPI
The Fed ain’t doin’ too bad either.