The inflation spike was at the pump, not in your grocery cart
Well, there it is. Inflation hit 3.1% in September. Sounds ugly. Then you look at what actually increased. Gasoline jumped nearly 28% and airfares climbed around 19%. Strip those out and the remaining categories barely moved.
The two measures that matter averaged about 1.9%. That is below the 2% target. Grocery prices rose 1.7%, the slowest pace since the spring of 2024. The stuff that would actually squeeze your monthly budget is not showing up hot.
So you have soft inflation, a calming grocery bill, and fixed rates that still crept up this week. That gap is the story. The data said one thing. Lenders heard something else. And the reason for that sits nine days out.
Fixed rates moved on the Governor's speech, not on the actual numbers
Fixed rates climbed this week because lenders changed their tone. Lenders heard that and got nervous.
Quick refresher - fixed rates track the cost lenders pay to borrow money for five years. That cost drifted up this week, and fixed rates followed. It is sitting at 2.25%.
Last week the panic pushing fixed rates up had started to ease after a weak jobs report. That reversed. Not because new data came in hot. September jobs were weak again and inflation outside gas is calm.
The October 28 decision is a genuine toss-up, and it lands on variable borrowers first
That tone versus data gap all comes to a head on October 28. Lenders are leaning toward a hold. The soft spots back that up. Jobs fell in both August and September, and unemployment is stuck around 6.5%.
If you are carrying a variable rate or a line of credit, this is the decision that touches you directly. A hike nudges your payment up within weeks. A hold will leave it as-is.
If you are shopping with a fixed rate in mind, the decision matters more for what it signals about where things head next than for an overnight change. But probably holds is not definitely holds. Treat the next nine days as a real event.
The hike fear is quietly cooling the market you are shopping in
The fear of higher rates has pushed buyers to the sidelines, and that is showing up in the numbers. National forecasts for home sales got cut again, a third straight downgrade for the year. September sales fell nearly 8% from a year ago, and the average sale price slipped to about $666,500.
A softer market is not bad news if you are the one buying. Less competition means more room to negotiate, less pressure to waive conditions, and more time to actually think.
If you are sitting on a pre-approval, this is the window where a steady hand pays off. You have got price flexibility on one side and a market still deciding where rates go on the other. That is a far better spot than chasing a frenzy.
My take
I think lenders got ahead of themselves this week. Fixed rates rose on a speech, not on evidence that inflation is actually broadening. When I look at the Bank's own numbers sitting below target, wage growth collapsed to 2%, and two straight months of job losses, I do not see a central bank that needs to slam the brakes over expensive gasoline. My read is that the energy spike acts like a tax that quietly kills other spending, which is disinflationary, not inflationary. So I lean toward the Bank holding on the 28th and the current rate jitters proving overdone. I could be wrong. If that gas-pump pressure starts leaking into everyday prices, the tone becomes the trend. That is the one number I am watching.
Insider tip
If you are a first-time buyer, open and fund your FHSA before you close, not after. The contribution room does not follow you into the year you buy, and the deduction lands on this year's taxes whether you buy next month or next spring. Even a last-minute top-up turns into both a bigger down payment and a tax refund you can put straight toward closing costs.
Go deeper: First Home Savings Account: Your Guide to Tax-Free Down Payment Savings
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