2026 Rate Forecast: Hold Now, Hike Later?

Economists now expect the Bank of Canada to hold rates steady through most or all of 2026 after 100 basis points of cuts in 2025.

The policy rate sits at 2.25%, with the BoC signalling it is “about the right level” amid resilient growth and tariff uncertainty.

Several banks see the next move more likely being a hike than a cut, possibly late 2026 or in 2027 if inflation reaccelerates.

While no change is the base case, risks remain two-sided, with cuts requiring economic deterioration and hikes tied to firmer inflation.