economic commentary
September 30, 2024 - Inflation Shows Steady Decline
After following an even path during the first half of the year, inflation levels in both the U.S. and Canada declined steadily during the third quarter. In Canada, headline CPI was 2.7% in June, followed by 2.5% in July and 2.0% in August. Inflation finally reached the Bank of Canada’s 2.0% target, representing a significant decline from the peak level of 8.1% reached in June 2022. In the U.S., inflation declined from 3.0% in June to 2.9% in July and 2.5% in August. Further declines are necessary in the U.S. in order for headline CPI to reach the Federal Reserve’s 2.0% target. However, recent declines in North American inflation has provided confidence to both the Bank of Canada and the Fed that inflation is now under control and they can comfortably lower interest rates from current levels. Inflation levels in Europe are exhibiting healthy declines as well. Inflation in the Eurozone dropped below 2.0%, with the most recent reading showing an annual rate of 1.8%. Inflation in the U.K. currently stands at 2.2%.
