Inflation in Canada decreased to 2.7% in April from 2.9% in March as food price growth began to slow. Additionally, core inflation fell to 1.6% in April after rising to 2% in March.

The slowing inflation data has led investors to predict that the Bank of Canada (BoC) will start cutting interest rates in the June meeting, with the probability increasing rapidly to 55% from 39% before the inflation data was announced.

Fed policymakers are seeking more helpful information to ensure that inflation will decline towards the Fed’s 2% target. Raphael Bostic, President of the Atlanta Fed, stated that the first rate cut must ensure that inflation does not rebound.