Economists at a Canadian bank expect the Bank of Canada to keep the Overnight Rate at 2.25% through 2026, then lift it back to a neutral 2.75% in 2027. They project 25bp increases in January and March 2027. The view contrasts with market pricing after the September decision, which leaned towards more tightening following the BoC’s firmer tone on inflation risks.
Growth and Trade Outlook
The forecast rests on softer growth and trade uncertainty limiting the need to respond quickly to oil-driven price pressures, unless energy costs feed into underlying inflation. Section 338 tariffs are due to take effect in August and are expected to weigh on momentum, with early July and August data already showing some deceleration.
Upcoming Public Appearances
The BoC is also scheduled for several public appearances at the IMF/IIF Annual Meetings in Bangkok.
