BMO Economics has introduced its BMO Economics Inflation Monitor, a new weekly summary of developments affecting the outlook for inflation. Released every Monday, the weekly report will monitor key news, announcements – both recent and upcoming – that have a bearing on the inflation rates and outlooks in Canada, the U.S. and other economies around the world. BMO Economics Inflation Monitor will serve as a convenient and accessible source of inflation news and analysis – representing one part of BMO's thought leadership on inflation and its economic impact, with more to come throughout 2022.

This week’s report notes the implications of the U.S. consumer price index figures for January released on Feb. 10, which represented the key inflation news from the past week.

"U.S. inflation hit a four-decade high, increasing the urgency for the Fed to hike rates – possibly sharply," said Priscilla Thiagamoorthy, Economist, BMO Capital Markets. "U.S. consumer prices climbed by a greater-than-expected 7.5 per cent year over year in January, while core prices rose 6.0 per cent. Both were the fastest since 1982."

The report also noted the University of Michigan's consumer sentiment report showing an uptick in one-year-ahead inflation expectations, the January NFIB survey showing net 61 per cent of small businesses hiking prices – the highest since 1974 – and WTI crude oil driving above $93/bbl given the escalation of Russia-Ukraine tensions.