Is 2% core inflation feasible this year?

Underlying inflation pressures are still well above the 2% mid-point of the Bank of Canada’s target range, but there are several reasons to expect disinflationary forces to build. We forecast that CPI inflation excluding food and energy will fall to 2% at the end of 2023, although the Bank’s preferred core measures, CPI-trim and CPI-median, probably won’t get down to 2% until mid-2024. Nevertheless, that won’t prevent the Bank from starting to cut interest rates before the end of this year.