Canada

Research evidence excerpt

Canada

Michael S Hanson (1-212) 622-8603 North America Economic Research J P M O R G A Nmichael.s.hanson@jpmchase.com

JPMorgan Chase Bank NA 26 June 2026

Bennett Parrish (1-212) 622-9003

bennett.parrish@jpmchase.com

JPMorgan Chase Bank NA

Canada Limited inflation spillovers now

Near-term assessments also suggest little pass-through into

• Despite calls for the BoC to downplay core inflation... underlying price pressures despite the oil price spike lifting

• … the May CPI report shows cool underlying inflation headline inflation. In the Summary of Deliberations for the

• … and thus supports a long policy hold BoC’s June meeting, Governing Council members indicated

they were prepared to look through the higher energy prices

A trio of communications from the Bank of Canada assessing for now, since inflationary pressures appeared “generally con-

near- and longer-term risks to price stability accompanied a tained” outside of energy prices. That assessment was broadly

CPI report that pointed to a jump in headline inflation but lit- confirmed by the May CPI report, released after the June pol-

tle if any broader spillover. While inputs into the upcoming icy meeting. Headline CPI rose 0.7% on the month (but 0.5%

quinquennial framework review suggested the BoC should after seasonal adjustment) to lift the over-year-ago inflation

downplay core measures, we expect the Governing Council rate to a nearly two-and-a-half-year high of 3.2%. Energy

will take some comfort from the recent low and stable core prices accounted for most of that increase, rising 0.8% in May

readings. Indeed, given excess supply and a slack labor mar- as gasoline prices jumped 5.6%m/m (both NSA).

ket, we see limited scope for renewed upside inflation risks as

the Strait of Hormuz reopens.