Headline CPI came in at 2.8% year-over-year in April, up from 2.4% in March. Sounds almost fine on paper. It's not.
Here's what's actually moving:
- Transportation: +7.6%
- Gasoline: +28.6%
- Fuel oil and other fuels: +41.3%
- Energy overall: +19.2%
The Middle East conflict has pushed global oil prices over $100 USD a barrel and it's showing up hard at the pump and on heating bills.
The Bank of Canada's preferred measures (CPI-trim and CPI-median) did drop to 2.0% and 2.1% which is probably why they're holding steady for now. But those strip out the volatile stuff, so they're not really capturing what people are feeling day to day.
Shelter is still up 1.8% YoY but it's not even the headline anymore. Food (+3.5%), transport (+7.6%), and health/personal care (+3.3%) all beat it this month.
On rate cuts: markets are pricing basically zero chance of anything happening June 10. July is at about 23%. The Bank of Canada also said for the first time this cycle that cuts and hikes are both still on the table, which tells you how uncertain things are right now.