Canada’s inflation rate rose to 3.1% in September, driven by higher energy costs. Core inflation cooled to 1.85%, revealing a divergence between headline and underlying inflation. This development presents a complex decision landscape for the Bank of Canada under Governor Tiff Macklem. Market pricing indicates a lower likelihood of a 50+ basis point rate increase. Market participants will closely monitor upcoming communications from the central bank ahead of the October 28 rate announcement.
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