A.M. Notes

Research evidence excerpt

A.M. Notes

June 22, 2026

Economic Research

NORTH AMERICA — ROBERT KAVCIC

Douglas Porter Chief Economist

Markets point to a stable start to the week as the U.S. and Iran iterate toward a deal. douglas.porter@bmo.com (416) 359-4887

Equity futures are a bit lower, although WTI oil prices have slid to $75. Treasury yields Robert Kavcic Senior Economist

are modestly higher, with the 10-year up about 3 bps to 4.48%. Beyond the Middle robert.kavcic@bmo.com (416) 359-8329

East, investors are still digesting Fed Chair Warsh's first FOMC meeting, where the Jennifer Lee Senior Economist

message he delivered was blunt—certainly not dovish, and arguably more hawkish than jennifer.lee@bmo.com (416) 359-4092

the market had expected. Legal Entity: BMO Nesbitt Burns Inc.

On deck today... The Canadian inflation report for May is the key release this morning.

Benjamin Reitzes notes that gasoline prices were up over 5% in the month, bringing

the cumulative increase to 38% since the start of the war. Fortunately, June is setting

up for a near-10% reversal. In addition to the push from energy prices, May is a

seasonally strong month for CPI. We’re looking for headline prices to climb +0.8%, not

far from last year’s increase. Food and recreation are expected to be areas of strength,

while the drag from housing continues. Our call would lift the yearly rate two ticks to

3.0%, the highest since fall 2023. Note that StatCan released its annual basket re-

weighting on June 15, which pushed up our forecast ever so slightly. Core inflation (CPI

Trim & Median) is expected to be steady or perhaps rise a tick, thanks largely to

favourable base effects. Our call would also drive the short-term metrics to accelerate.

The three-month annualized rates will likely push above 3%, while the six-month rate