Economists Start Betting Against an Eighth Straight Bank of Canada Hold
The policy rate has sat at 2.25 per cent since a quarter-point cut in October 2025. An eighth consecutive hold is still the widely predicted outcome next week, but a growing number of economists and traders now expect the central bank to raise its trend-setting rate to tamp down stubborn inflation.
Governor Tiff Macklem recently warned the bank may need to raise borrowing costs if energy prices stay elevated, pointing to “no resolution in sight” for the conflict in the Middle East that has roiled global energy markets for months. The latest inflation data from Statistics Canada, out Monday, put a spotlight on soaring energy costs.
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Scotiabank's Derek Holt is among those calling for a hike, and his Monday note is refreshingly hedged: not a slam dunk, but probably enough supporting evidence. Central bankers rarely get a call that clean, and admitting it out loud is better than pretending the data decided for them.
The bill lands somewhere else. Mortgage and debt experts say higher rates hit a sagging real estate market hard, and insolvency manager Scott Terrio's image of tossing a drowning man an anchor captures why borrowers will not experience this as a tidy judgment call.