Navigating Inflation Trends and Implications

This chapter delves into the nuances of inflation rates, contrasting stable services inflation at 4.2% with decreasing goods inflation at 1.0%, particularly focusing on the impact of the shelter component. The discussion explores the challenges of year-on-year comparisons, debates potential rate hikes, and scrutinizes the likelihood of interest rate cuts by the Bank of Canada based on current trends. Additionally, the chapter addresses food inflation complexities, highlighting issues like shrinkflation and substitution effects that affect vulnerable groups and consumers' ability to afford healthy food.