The CPI data showed the Bank of Canada’s preferred CPI-trim and CPI-median core measures rose by an average of 0.2% m/m in May, which was lower than in the previous month but still a bit too strong for comfort. Several goods prices rose strongly, as was expected given tariff effects and the earlier weakening of the loonie. On the whole, these factors should be transitory, particularly as the loonie has since rebounded. But several services prices also rose strongly in May, which could signal more entrenched inflationary pressures.
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