According to the Cleveland Fed Inflation Nowcasting Model, the annual inflation rate in the CPI report is expected to be 2.9 percent in December. Core inflation is also seen hovering near 3 percent.
By the time inflation peaked at 9 percent in 2022, federal debt equaling about 10 percent of GDP had effectively been erased through higher prices.
Voters hated the inflation, and they made that clear at the ballot box in 2024.
Canada’s inflation rate slowed to 1.7 percent on a year-over-year basis in July compared to 1.9 percent the month before, according to Statistics Canada.
It also means we should expect inflation to be “higher for longer,” notwithstanding a mild recent inflation report, as the supply of labor and goods tightens relative to demand.
After 30 years, a dollar would be worth $0.55 at 2 percent inflation, but only $0.13 if inflation averages 7 percent.
A Final Warning on Inflation and Debt
Inflation risk is particularly concerning for long-term investors.
Prime Minister Anthony Albanese pushed back, insisting inflation had eased significantly since Labor took office.
“When we were elected … inflation had a six in front of it.
For investors, the long-term capital gains tax rates remain at zero percent, 15 percent, and 20 percent, with the first two thresholds adjusted for inflation.
It calculates inflation in the way it was done in the 1980s. It comes up with astounding results that produce inflation numbers that are generally twice the official data. This strikes me as far more accurate.
Ambient food inflation fell to 3.3 percent from April’s 3.6 percent.
BRC Chief Executive Helen Dickinson said: “While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month.
Economist Mark Skousen, Wall Street expert and Chapman University professor, joins us to break down the risks, opportunities, and trends shaping today’s economy—from consumer spending and inflation to national debt and market performance.
Macklem said with inflation near the target and the economy in excess supply, the risk of higher energy prices fuelling inflation looks contained for now.
Commentary
President Donald Trump should follow up on his historic “big, beautiful” tax bill with an extra booster shot for the economy by immediately indexing the capital gains taxes for inflation.
Government spending in B.C. has reached its highest level on record after adjusting for inflation, totalling $13,711 per person in 2025, according to a new study.
Non-energy industrial goods inflation also eased to 0.4 percent from 0.5 percent, and services inflation—a key focus for the ECB—slowed modestly, to 3.4 percent from 3.5 percent on an annual basis.
Looking ahead to the September inflation data, the Cleveland Fed's Inflation Nowcasting Model anticipates that the annual inflation rate will reach 3 percent for the first time since January.
Inflation Is Coming, the Fed Says
While inflationary pressures have not intensified, policymakers predict that higher tariffs will lead to higher inflation this summer.
Inflation numbers were revised up for 2026 mainly because of expectations that inflation in the services industry would decline more slowly, the central bank said.
