Canada’s annual inflation rate held at 3.0% in August 2026, matching expectations, while the consumer price index fell 0.1% from July. Gasoline prices rose 22.8% year on year, food inflation slowed to 2.8%, and travel and tour prices jumped 26.1%. The Bank of Canada’s preferred CPI-median and CPI-trim measures were unchanged at 2.0% and 1.9%, respectively. The data indicated that underlying price pressures remained contained, although Governor Tiff Macklem has warned that a prolonged Middle East conflict and higher energy prices could feed through the economy. The S&P/TSX Composite Index closed nearly flat at 35,702, with financials mostly lower amid rising yields. Gold’s decline weighed on mining shares, while Celestica fell 8.4% in line with a U.S. semiconductor selloff. The Bank of Canada held its key policy rate at 2.25% for a seventh consecutive meeting, while markets widely expected the U.S. Federal Reserve to raise rates on Wednesday. Canada’s 10-year government bond yield rose near 3.95% in September, the Canadian dollar weakened and two-year yields firmed after the inflation release.