Royal Bank of Canada (RBC) economists Nathan Janzen and Abbey Xu expect Canada\u2019s June Consumer Price Index to show headline inflation easing to 2.8% year-over-year from 3.2% in May, mainly on lower energy prices. Core measures excluding food and energy are seen holding near 1.6%, with the Bank of Canada likely staying on hold through 2026 as inflation gradually returns toward its 2% target.<\/p>\n
Headline softens while core stays steady<\/p>\n
“We expect headline inflation eased to 2.8% year-over-year, down from 3.2% in May.”<\/p>\n
“Outside of more volatile components, inflation pressures are expected to remain broadly stable.”<\/p>\n
“We expect inflation excluding food and energy to hold close to 1.6% y\/y, little changed from May, while the BoC’s preferred core inflation measures are likely to remain consistent with inflation running near the 2% target.”<\/p>\n
“Recent inflation reports have continued to point to a divergence between headline and underlying inflation with headline readings boosted by elevated energy prices, while broader price pressures have stayed comparatively contained.”<\/p>\n
“This is in line with both the BoC’s latest projections and our base case forecasts, which assume inflation will gradually return toward the 2% target over the forecast horizon while the central bank remains on hold through 2026.”<\/p>\n