BMO Notes "Snippy" Industrial Product Prices in Canada

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BMO Notes "Snippy" Industrial Product Prices in Canada

, MT Newswires - 6:57 AM ET 3/21/2025 default

06:57 AM EDT, 03/21/2025 (MT Newswires) -- Inflation is back in the spotlight in Canada, noted Bank of Montreal (BMO).

February's "hot" consumer price index report still had some of the sales tax holiday baked in, so there are further upside risks for March, and didn't have any United States tariffs in place yet, said the bank.

The coming removal of the consumer carbon tax will provide some relief starting in April, but it's safe to say that upside inflation risks have risen "meaningfully" in just the past few months, stated BMO.

Another indicator pointing in that direction is producer

prices, added the bank. The yearly industrial product price index (IPPI) rate may have ticked down in February, but growth has accelerated on this basis since September.

While lower oil prices -- if sustained -- will help, the U.S. tariffs and uncertainty will raise costs even further for producers, according to BMO. The degree to which those higher costs will flow through to consumers, and spread beyond the initial tariff bump, will be key for the Bank of Canada's decisionmaking going forward.

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