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Inflation 4.4% September 2021

in Bank of Canada, Inflation, Stats Canada

For those that have not followed me since 2005, allow me to say, I told them so. Back in 2009, I warned Inflation was coming with all this stimulation, and here it is (in 2021).

OK, so I am very much the Blogger who Cried Wolf on Inflation. This does seem to be the beginning of something, maybe even an Inflationary spiral.

Stats Canada thinks:

Prices rose year over year in every major component in September, with transportation prices (+9.1%) contributing the most to the all-items increase. Higher shelter (+4.8%) and food prices (+3.9%) also contributed to the growth in the all-items CPI for September.

From Consumer Price Index, September 2021

This is the highest rate since before I started commenting in 2005? Sounds like this is no longer a bump in the road, it might be a more elongated period of price increases. The Bank of Canada thinks this is going to last more than just a couple of months. Their statement about Interest rates is they may be going up sooner than expected. Interest rates are their only tool to slow inflation (aside from not printing too much money).

In reaction, the Bank of Canada announced the end of their Quantitative Easing program too.

… With the economy once again growing robustly, Governing Council judged that QE is no longer needed. This means we will stop growing our holdings of Government of Canada bonds….

Tiff Macklem – Governor Ottawa, Ontario October 27, 2021

Their commentary about inflation is more telling.

In Canada, inflation is currently running at about 4½ percent. We now expect it will rise to close to 5 percent by the end of this year, before coming back down to around the 2 percent target by the end of next year.

Tiff Macklem – Governor Ottawa, Ontario October 27, 2021
Microsoft Canada

Additional Reads From Stats Canada

Previous Rants About Inflation

And that is just scratching the surface.

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