Bank of Canada survey shows eased inflation outlook as firms breathe easier after Iran ceasefire

Bank of Canada survey shows eased inflation outlook as firms breathe easier after Iran ceasefire

Canadian businesses revised their inflation expectations downward following the US-Iran ceasefire, creating a macro backdrop that's fueling risk appetite across crypto markets.

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by Editorial Team

Canadian firms are feeling a lot less anxious about inflation, and geopolitics deserves most of the credit. The Bank of Canada’s latest Business Outlook Survey shows that one-year-ahead inflation expectations among businesses have softened meaningfully, driven by declining energy prices in the wake of the US-Iran ceasefire framework announced in mid-June 2026.

Before the ceasefire, the picture looked different. Firms had reported a slight uptick in short-term inflation expectations, pointing to rising costs for oil, fertilizer, and freight as the culprits. Then diplomacy intervened, oil prices started falling, shipping lanes stabilized, and suddenly the inflation boogeyman looked a lot less scary.

The numbers behind the shift

Canada’s Consumer Price Index hit 3.2% year-over-year in May 2026. That’s still above the BoC’s 2% target, but core inflation sat at just 1.6%, suggesting the headline number was being driven by volatile energy costs rather than broad-based price pressures.

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Long-term inflation expectations among surveyed firms remain anchored in the 2.5% to 3% range. Analysts now project that headline inflation will hover around 3% before gradually drifting back toward that 2% target, potentially reaching it by 2027.

The Bank of Canada held its overnight rate steady at 2.25% at its June meeting. BoC Governor had previously flagged energy-driven inflation risks and warned of a “bumpy CPI path,” but the ceasefire has smoothed out a lot of those bumps.

Why crypto markets are paying attention

Bitcoin surged approximately 4% to a two-week high near $67,000 on June 15, 2026, as the ceasefire news broke. Crypto-linked equities also benefited from the improved sentiment.

The bigger macro picture

Before the ceasefire, the BoC’s Q1 2026 Business Outlook Survey had captured firms bracing for higher input costs. Rising oil prices were feeding into transportation and production expenses across sectors. Fertilizer costs were squeezing agricultural producers. Freight rates were climbing as shipping insurers priced in geopolitical risk.

The ceasefire unwound much of that pressure in a matter of weeks.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
MACRO

Bank of Canada survey shows eased inflation outlook as firms breathe easier after Iran ceasefire

Bank of Canada survey shows eased inflation outlook as firms breathe easier after Iran ceasefire

Canadian businesses revised their inflation expectations downward following the US-Iran ceasefire, creating a macro backdrop that's fueling risk appetite across crypto markets.

by Editorial Team

Share

Add us on Google

Canadian firms are feeling a lot less anxious about inflation, and geopolitics deserves most of the credit. The Bank of Canada’s latest Business Outlook Survey shows that one-year-ahead inflation expectations among businesses have softened meaningfully, driven by declining energy prices in the wake of the US-Iran ceasefire framework announced in mid-June 2026.

Before the ceasefire, the picture looked different. Firms had reported a slight uptick in short-term inflation expectations, pointing to rising costs for oil, fertilizer, and freight as the culprits. Then diplomacy intervened, oil prices started falling, shipping lanes stabilized, and suddenly the inflation boogeyman looked a lot less scary.

The numbers behind the shift

Canada’s Consumer Price Index hit 3.2% year-over-year in May 2026. That’s still above the BoC’s 2% target, but core inflation sat at just 1.6%, suggesting the headline number was being driven by volatile energy costs rather than broad-based price pressures.

Advertisement

Long-term inflation expectations among surveyed firms remain anchored in the 2.5% to 3% range. Analysts now project that headline inflation will hover around 3% before gradually drifting back toward that 2% target, potentially reaching it by 2027.

The Bank of Canada held its overnight rate steady at 2.25% at its June meeting. BoC Governor had previously flagged energy-driven inflation risks and warned of a “bumpy CPI path,” but the ceasefire has smoothed out a lot of those bumps.

Why crypto markets are paying attention

Bitcoin surged approximately 4% to a two-week high near $67,000 on June 15, 2026, as the ceasefire news broke. Crypto-linked equities also benefited from the improved sentiment.

The bigger macro picture

Before the ceasefire, the BoC’s Q1 2026 Business Outlook Survey had captured firms bracing for higher input costs. Rising oil prices were feeding into transportation and production expenses across sectors. Fertilizer costs were squeezing agricultural producers. Freight rates were climbing as shipping insurers priced in geopolitical risk.

The ceasefire unwound much of that pressure in a matter of weeks.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.