- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted October 22, 2025 at 9:45 am
Stronger September inflation caught forecasters off guard, but markets took it in stride—and bets on Bank of Canada cuts cooled.
Canada’s September inflation reading surprised economists, with consumer prices rising 0.1% when a slight dip was widely expected.
Annual inflation accelerated to 2.4%, topping both last month’s figure and forecasts. Core inflation, which excludes volatile food and energy prices, held firm at 3.2%, and the seasonally-adjusted CPI clocked its fastest monthly jump in over a year. Most of the uptick came from higher grocery and energy bills, while categories like shelter stayed pretty subdued. Despite the headline beat, Canadian bonds and the loonie barely moved, showing that investors saw little reason for knee-jerk reactions—especially since underlying inflation stayed close to the Bank of Canada’s comfort zone. Even so, traders have scaled back their bets on rate cuts from the central bank this year, with expectations cooling for a policy change at October’s meeting.
For markets: Markets shrug off headline heat.
Markets appeared unfazed by the headline inflation surprise, thanks to steady underlying figures and softening housing costs. Still, traders slashed their expectations for a Bank of Canada rate cut by year-end—odds of an October move fell from 76% to just 65%, and now markets are penciling in less than one full 0.25% cut by December. That’s a sharp reversal from early-year predictions of multiple cuts—so investors are keeping a close eye on upcoming data.
The bigger picture: Inflation’s persistence keeps policymakers on edge.
September’s inflation jump is a reminder that Canada’s price pressures haven’t fully cooled. Even as core inflation stays contained, climbing food and energy costs keep consumers and policymakers wary. While some analysts say the market may be reading too much into one hot month, the Bank of Canada now looks more likely to hold steady and await further signs before making any moves—a stance global investors will be watching closely.
—
Originally Posted October 22, 2025 – Canada’s Inflation Picked Up, But Rate Cut Odds Dropped
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Related Articles
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!