Bank of Canada Seen Holding Steady This Year as It Signals No Urgency to Move, Economists Say

Stronger data and resilient markets have improved the Bank of Canada's near-term outlook, but not its medium-term view, allowing economists to predict the central bank will remain on hold through the rest of 2026. The BoC on Wednesday decided to leave rates on hold for the sixth-consecutive policy meeting as it assessed a mixed economic outlook and easing inflation pressures. "It doesn't seem like the Bank is in any rush whatsoever to move off the sidelines, even if their rhetoric leans slightly hawkish," wrote Bank of Montreal Capital Markets Chief Economist Douglas Porter. "The Bank's tone around the economic outlook was a tad more upbeat, with plenty of suggestions that growth was turning the corner." "Canada's economy is showing signs of improvement," wrote the BoC in its opening statement on Wednesday. It defined the current rate as appropriate. The BoC expects Q2 gross domestic product growth to rebound to 2.5% annualized, supported by stronger exports, consumer spending, and business investment despite a soft labor market. The Monetary Policy Report left the broader outlook largely unchanged, while continuing to emphasize elevated uncertainty. The BoC's "message.