Core Viewpoint - The Bank of Montreal's chief economist Doug Porter asserts that there is no justification for the Bank of Canada to lower interest rates in July due to persistent core inflation despite economic growth being below potential [1] Economic Indicators - The core Consumer Price Index (CPI) in Canada remained at 3% in June, which is at the upper limit of the Bank of Canada's inflation target range [1] - The increase in housing costs is contributing to upward pressure on core inflation [1] Price Changes - The retaliatory tariffs on U.S. imports are partially responsible for the high core inflation [1] - In June, the price of durable goods accelerated to a 2.7% increase from 2% in May [1] - The automotive prices rose by 4.1%, furniture prices increased by 3.3%, and clothing and footwear prices went up by 2% [1]

Core Viewpoint - Economists caution against being misled by the strong overall data in Canada's Q1 GDP report, highlighting the underlying economic fragility despite a 2.2% annualized growth rate driven by businesses increasing capacity ahead of tariffs [1] Economic Performance - Canada's Q1 GDP annualized growth rate reached 2.2%, influenced by businesses ramping up production before tariffs took effect [1] - Domestic final demand contracted by 0.1% in Q1, indicating a more accurate reflection of the economy's health [1] Monetary Policy Implications - The acceleration of core inflation should prompt the Bank of Canada officials to consider a 25 basis point cut in the benchmark interest rate in the upcoming meeting [1] - The GDP data suggests that the economy was already stagnating before the full impact of tariffs became evident [1]