The Bank of Canada is the live decision in a week of expected holds. A majority of economists polled by Reuters expect the Bank to raise the target for the overnight rate by 25 basis points to 2.50 percent on Wednesday and to follow with one more hike by the end of March, to pre-empt a further rise in inflation expectations after consumer prices rose 3.1 percent in September. The policy rate has sat at 2.25 percent all year, unchanged since a cut in October 2025, through seven consecutive decisions.
Market pricing leans the same way, which is what makes the dissenting previews interesting. Rabobank’s preview, titled “We say no, but the market says go”, forecasts a hold at 2.25 percent while noting that overnight index swap pricing implies about 85 percent of a 25 basis point hike. A hold against that pricing would be read as a dovish surprise and would likely reverse part of the Canadian dollar’s recent firming: USD/CAD closed Friday at 1.4004 in this site’s market tables, down 0.82 percent on the week.
The case for waiting rests on the real economy rather than the price data. Canada shed jobs in both August and September, household insolvencies are rising, and the breakdown of trade talks with the United States, with new tariffs covering part of Canadian goods exports, clouds the growth outlook that the new Monetary Policy Report will set out. Governor Tiff Macklem has argued the Bank can look through an oil shock only until it spreads into broader prices, which is the judgement the September inflation print tests.
Because the decision arrives with the Monetary Policy Report, the forecast is half the event. A hike delivered with projections that show inflation returning to target would read as insurance. A hike with an upward revision to the inflation path would price a longer cycle, consistent with the Reuters poll’s second hike by March. A hold with the same upward revision would leave December 9 as the meeting the market reprices instead.