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Economists have locked in their calls for today’s BoC rate decision. Most agree that recent data, including an unexpectedly strong jobs report for November, make the case for Canada’s central bank to shift to the sidelines.
At the Bank’s last meeting in late-October, governor Tiff Macklem said rates are “at about the right level” to keep inflation near its two per cent target as the economy adjusts to recent challenges.
“That was about as clear a sign that the BoC has shifted to the sidelines as one could imagine,” Derek Holt, Scotiabank’s head of capital markets economics, wrote in a report on Tuesday.
“And so they should, in order to allow time for the long and variable lags on monetary policy actions to work their way through a muddled mixture of demand and supply side risks over the coming several quarters,” he added. “Recent data support a prolonged pause.”
Scotiabank now forecasts the Bank of Canada will raise rates by 50 basis points, beginning in the second half of 2026.
CIBC chief economist Avery Shenfeld is also in the hold camp for today’s Bank of Canada rate decision.
“The Bank of Canada will be comfortable standing pat,” he wrote a recent report.
“Its statement will give a nod to economic uncertainties and some weak spots within the Q3 GDP figures, but might also cite signs that the labour market is improving. Expect it to repeat its message that rates are now at an appropriate level, reinforcing expectations that barring an economic surprise, they could be on hold for an extended period.”
RBC economists Nathan Janzen and Claire Fan expect a hold today from the Bank of Canada, calling this outcome a “relatively uncontroversial” move.
Royce Mendes, managing director and head of macro strategy at Desjardins, says the Bank was “clear and forceful” in October, when it signalled further cuts are unlikely.
“We are no longer forecasting any more cuts for this cycle,” he wrote on Dec. 5.
“We expect the Bank of Canada will maintain the language from the last statement about the current level of rates being appropriate,” Mendes added. “However, for the next six months or so, until fiscal policy becomes a more important player, the Bank of Canada is the only game in town for the economy.”