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July CPI cements the case for another 25 bp cut

The muted gains in the Bank of Canada’s preferred core price measures in July make another interest rate cut at the September meeting seem inevitable. The Bank will be encouraged by the second soft monthly gain in rents, which may be a sign that we have underestimated how quickly shelter inflation will fall. If so, headline inflation could return to 2% on a sustained basis sooner than we anticipated.

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