Market Outlook: Bank of Canada rate hold expected as oil prices lift inflation
The Bank of Canada is expected to keep interest rates unchanged as policymakers assess the impact of rising oil prices and a steady economic backdrop. Markets are pricing in no change in interest rates at the Bank of Canada's latest decision, with potential rate hikes beginning in 2027.
The Bank of Canada is expected to keep interest rates unchanged at its latest decision. Markets are pricing in no change, with the central bank expected to remain on hold through 2026. Jason Daw, head of North America rates strategy at RBC Capital Markets, says the bank may start raising interest rates in 2027, but there is a risk that rate hikes could be brought forward if economic data strengthens. Rising oil prices are lifting headline inflation, but the broader impact on core inflation remains uncertain. Canadian economic growth is seen as stable at around 1.5 per cent, given trade pressures and weak population growth. The central bank's next moves will be closely watched for any shift in tone that could signal future tightening.
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