When the Bank of Canada held its overnight rate at 2.25% in December, it sent a strong signal it would hold the rate until the Canadian economy or other factors forced its hand to make a move.
In its statement in December, the bank said the rate is “about the right level” to manage inflation and economic challenges as well as damage from tariffs.
With a new year and a new Bank of Canada rate announcement schedule upon us, Canadian Mortgage Professional polled economists on their predictions of what those announcements might be.
Some said a year-long hold on rates, while others said a hold for the first six months, followed by rate hikes to end the year.
Derek Holt of Scotiabank Economics is of the mind its the latter, adding the hikes in the second half of 2026 would be in the area of .5%, saying the current rate already might be .25% to .5% too low.
Alberta-based chief economist at Servus Credit Union, Charles St-Arnaud, suggested a long-term hold: “The overall message from the decision is that the global and Canadian economies have been resilient in the face of the US tariffs,” he said, adding “the threshold for a cut is relatively high and would require a significant deterioration of the outlook.”
Bradley Saunders, of Capital Economics, said the company changed its original expectation of a cut in early 2026 based on moderate growth and contained inflation.
“This all but kills our previously held view that the policy rate would eventually be lowered into accommodative territory at some point, given a sluggish recovery and lack of any offsetting short-term stimulus measures in the federal government’s latest budget,” he said. “That said, we still hold a relatively dovish view," adding, “uncertainty remains elevated. If the outlook changes, we are prepared to respond.”
Oxford Economic’s Senior Economist, Michael Davenport said, ”stronger‑than‑expected (third‑quarter gross domestic product) and recent labour market data likely solidified (the Bank of Canada’s) decision to stand pat after back‑to‑back 25‑basis‑point rate cuts.” Davenport expects the bank to stay on hold through the year, “with the next move likely a rate hike to 2.75%, but not until 2027.”
Taylor Schleich and Ethan Currie, National Bank of Canada economists, say the Bank of Canada “stopped short of validating market expectations for rate hikes as soon as the middle of next year. Going forward, we see the bank holding steady through at least the first half of the year, with a possible hike late in the year if unemployment continues to fall and inflation heats up."
At RBC, Claire Fan, senior economist, said the Bank of Canada delivered a “well‑telegraphed, widely‑expected hold and we think the bank is done with rate cuts, and the next change in interest rates is more likely to be a hike,” following 275 basis points of easing since mid‑2024.
BMO Chief Economist, Douglas Porter said the bank’s language pointed to a year on pause. “We shifted our call to no rate changes for all of 2026 recently, and messaging from the bank appears aligned with that view,” he said. “There is greater chance of a rate cut than a hike in 2026, even if the most likely outcome is no move at all.”
And, TD economist Marc Ercolao said the bank “reinforced that it feels comfortable with the current level of interest rates,” and was “likely done with rate cuts for 2026, pending any upcoming economic turbulence."
For those wanting to keep score, here are the Bank of Canada’s rate announcement dates for 2026: Jan 28; March 18; April 29; June 10; July 15; Sept. 2; Oct. 28, and; Dec. 9