Canada's Inflation Rate Drops to 2.9%, Easing Rate Cut Speculation

The slowdown in inflation gives the Bank of Canada room to consider rate cuts, as consumer demand impacts discretionary spending.

Canada's consumer price index rose 2.9% in January, down from 3.4% in December, marking the first time since June it fell within the central bank's control range.
The yield on benchmark two-year Canadian debt plunged about 13 basis points, indicating a positive market response.
Core inflation measures also decelerated, averaging 3.35%, suggesting easing price pressures.
The Bank of Canada now has more flexibility in its monetary policy, potentially leading to rate cuts in the coming months.
January's inflation data shows progress in disinflation, alleviating concerns over persistent underlying inflation.