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RBC expects Canada CPI to cool, Bank of Canada to stay on hold

RBC forecasts headline inflation falling to 2.8% year over year in June, while core inflation is expected near 1.6%.

Reported · Written up by our desk · Central Banks

RBC economists Nathan Janzen and Abbey Xu expect Canada’s June Consumer Price Index to show headline inflation easing to 2.8% year over year, down from 3.2% in May, with the slowdown driven mainly by lower energy prices, according to an FXStreet note.

They also see core measures, excluding food and energy, holding near 1.6%, suggesting underlying inflation remains steady rather than accelerating.

On that basis, RBC expects the Bank of Canada to remain on hold through 2026 as inflation gradually returns toward the central bank’s 2% target.

FXStreet also flagged a separate outlook context that includes Canada’s inflation divergence shaping the broader BoC rate path, with additional market focus on other major upcoming data and earnings.

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