$2.16K
1
8
$2.16K
1
8
Trader mode: Actionable analysis for identifying opportunities and edge
This is a market about the variation of consumer prices over the 12-month period ending December 2026 in Canada, before seasonal adjustment, as reported by Statistics Canada. This market will resolve according to the percentage change in the Consumer Price Index (CPI) over the 12-month period ending December 2026, according to the monthly Statistics Canada report. The resolution source for this market will be the Statistics Canada Consumer Price Index monthly report released for December 2026
Right now, traders on prediction markets are essentially making a coin flip bet. They see a roughly 4 in 10 chance that Canada's annual inflation rate for 2026 will land between 3.5% and 3.9%. This is the leading forecast among several specific ranges being traded. The market isn't showing strong confidence in any single outcome, but this narrow band just below 4% is currently seen as the most likely single bracket. It suggests a collective view that inflation will remain persistent but could be slowly moderating compared to recent years.
The current odds reflect two main economic forces. First, the Bank of Canada's ongoing effort to control inflation through higher interest rates is expected to keep slowing the economy, which should gradually reduce price pressures. However, traders aren't betting on a quick return to the 2% target. Second, structural factors like high housing costs and demographic changes are seen as sticky problems that may prevent a rapid decline in inflation. The forecast for 2026 is also shaped by recent history. After inflation peaked above 8% in 2022, the slow and bumpy descent back toward 3% through 2024 and 2025 makes a further drop below 3.5% in 2026 seem uncertain to many observers.
The most important signals will come from the Bank of Canada's policy decisions and statements throughout 2025. Each announcement about interest rates will shift expectations for 2026. Key monthly Consumer Price Index (CPI) reports from Statistics Canada, especially in late 2025 and early 2026, will show if the trend is breaking lower or stalling. Global events in 2025, such as changes in oil prices or supply chain disruptions, could also reshape the 2026 outlook well before we get there.
Prediction markets have a mixed record on long-term economic forecasts like this. They often effectively aggregate expert views on near-term events, but a forecast for a specific number over two years away is highly speculative. Much can change in the Canadian and global economy. The very low trading volume on this specific question, with only about $2,000 wagered, also means it represents a thin consensus from a small group. It's a useful snapshot of current professional sentiment, but it should be seen as a starting point for discussion, not a firm forecast.
The Polymarket contract for Canada's 2026 annual inflation is thinly traded, with only about $2,000 in total volume. The most active contract asks if inflation will be between 3.5% and 3.9%. It trades at a 41% probability. This price indicates the market sees this specific band as the single most likely outcome, but still views it as uncertain. Other contracts for lower and higher ranges hold the remaining probability, showing a wide dispersion of possible outcomes. The low liquidity means these prices are more indicative of early sentiment than a deep, consensus forecast.
The pricing reflects a market expectation that Canada's inflation problem will persist but moderate. The Bank of Canada's 2% target is not the market's central case for 2026, nearly three years from now. This skepticism stems from entrenched factors like high shelter costs and sticky service inflation, which have proven difficult to tame. The market is effectively pricing in a "higher for longer" scenario where inflation settles well above the central bank's goal. Current analyst forecasts for 2024 and 2025 inflation, which remain above 2%, support this longer-term cautious outlook. The concentration of probability in the 3.5%-3.9% range suggests traders believe structural pressures will prevent a full return to target.
Two opposing forces will move this market over its 331-day lifespan. A faster-than-expected decline in core inflation metrics through 2024, potentially forcing the Bank of Canada into aggressive rate cuts, could shift probability toward lower ranges. Conversely, new supply shocks in energy or food, or a resurgence in wage growth, would increase bets on higher outcomes. The most important near-term catalyst is the Bank of Canada's own policy path and communications. If the bank signals high confidence in returning to 2% by 2025, the 2026 forecast will adjust downward. Major fiscal policy announcements from the federal government could also redirect the long-term trajectory. Given the resolution is based on a December 2026 report, this market will primarily trade on forward guidance from the central bank and monthly CPI prints over the next two years.
AI-generated analysis based on market data. Not financial advice.
This prediction market focuses on Canada's annual inflation rate for the calendar year 2026, specifically the percentage change in the Consumer Price Index (CPI) from December 2025 to December 2026. The CPI is the primary measure of inflation in Canada, tracking the average change over time in the prices paid by urban consumers for a representative basket of goods and services. Statistics Canada, the national statistical office, calculates and publishes this data monthly. The resolution for this market will be based on the official CPI figure released by Statistics Canada in its monthly report for December 2026. Inflation is a core economic indicator that directly influences monetary policy, wage negotiations, government benefits, and investment decisions. Interest in Canada's 2026 inflation stems from its role as a lagging indicator of economic health and a key variable in forecasting future interest rate paths set by the Bank of Canada. Market participants, including economists, investors, and policymakers, analyze inflation trends to gauge the effectiveness of current policies and predict future economic conditions. The forecast for 2026 is particularly significant as it represents a medium-term outlook, beyond the immediate policy horizon, and will reflect the cumulative impact of economic decisions made in the preceding years.
Canada's experience with inflation has varied significantly over recent decades. The Bank of Canada formally adopted an inflation-targeting framework in 1991, initially setting a target range of 1-3% with a 2% midpoint. This policy is renewed every five years through an agreement between the Bank and the federal government. For most of the period from the mid-1990s until 2020, inflation remained relatively low and stable, consistently near the 2% target. This period, often called the 'Great Moderation,' was characterized by anchored inflation expectations. The COVID-19 pandemic disrupted this stability. Supply chain bottlenecks, shifts in consumer demand, and fiscal stimulus contributed to a global surge in inflation. Canada's annual CPI inflation peaked at 8.1% in June 2022, a level not seen since the early 1980s. In response, the Bank of Canada embarked on an aggressive tightening cycle, raising its policy interest rate from 0.25% in March 2022 to 5.0% by July 2023. By late 2023 and into 2024, inflation had begun to recede, but core measures of inflation, which exclude volatile components like food and energy, remained stubbornly above the 2% target. The path to the 2026 inflation rate will be shaped by how effectively this post-pandemic inflationary episode is contained and whether long-term expectations return to the 2% anchor.
The inflation rate for 2026 matters because it is a primary determinant of purchasing power for Canadian households. Wages, pensions, and social benefits like the Canada Pension Plan are often indexed to inflation. A rate significantly above the 2% target erodes real income, particularly for those on fixed incomes, while very low inflation can signal weak demand and economic stagnation. For the Bank of Canada, the 2026 outcome is a critical test of its credibility in meeting its inflation-control mandate. Persistent deviation from the target could unanchor inflation expectations, making future price stability harder to achieve. This would force more volatile and potentially damaging shifts in interest rates. Financially, the inflation rate directly influences real returns on investments and the real cost of borrowing. It affects everything from mortgage rates and government bond yields to corporate investment decisions. A stable, predictable inflation environment in 2026 would support long-term economic planning and growth.
As of early 2024, Canada's headline CPI inflation has declined from its 2022 peak but remains above the 2% target. The Bank of Canada's most recent interest rate decision in January 2024 held the policy rate at 5.0%, citing that while progress has been made, underlying inflationary pressures persist. Governing Council has stated it is too early to consider lowering the policy rate. The central bank's January 2024 Monetary Policy Report projected inflation to remain around 3% through the first half of 2024 before gradually declining to the 2% target in 2025. The economic conditions being set in 2024 and 2025 will largely determine the 2026 outcome.
Statistics Canada calculates the CPI by tracking price changes for a representative basket of over 700 goods and services commonly purchased by Canadian households in urban areas. Prices are collected monthly from thousands of retail and service outlets across the country. The basket's composition is updated every two years to reflect changing consumer spending patterns.
Headline inflation is the year-over-year percentage change in the total Consumer Price Index. Core inflation refers to measures like CPI-trim, CPI-median, and CPI-common, which exclude components with the most volatile prices (e.g., food and energy). The Bank of Canada closely monitors core measures to gauge underlying, persistent inflationary trends.
The Bank's primary tool is its target for the overnight interest rate. To cool inflation, it raises this rate, which increases borrowing costs for consumers and businesses, slowing spending and economic activity. To stimulate the economy and raise inflation if it is too low, it lowers the overnight rate.
High inflation can be caused by demand outpacing supply (demand-pull inflation), rising costs of production like wages and raw materials (cost-push inflation), or a combination of both. External shocks, such as global energy price spikes or supply chain disruptions, are also common drivers.
Statistics Canada typically releases CPI data for a given reference month around the third week of the following month. Therefore, the CPI data for December 2026, which resolves this market, is expected to be published in mid-to-late January 2027.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
8 markets tracked
No data available
| Market | Platform | Price |
|---|---|---|
| Poly | 40% |
| Poly | 38% |
| Poly | 36% |
| Poly | 36% |
| Poly | 33% |
| Poly | 28% |
| Poly | 18% |
| Poly | 13% |
No related news found
Add this market to your website
<iframe src="https://predictpedia.com/embed/gDlRio" width="400" height="160" frameborder="0" style="border-radius: 8px; max-width: 100%;" title="Canada Annual Inflation 2026"></iframe>