OTTAWA – Economic experts widely expect the Bank of Canada to maintain its benchmark interest rate at its current level during its first policy announcement of the year this Wednesday. Many analysts further predict that the central bank may keep the rate unchanged for the remainder of 2026 as the economy adjusts to the current borrowing environment. According to LSEG Data & Analytics, financial markets indicated an 89% probability as of Friday that the bank will hold its key rate steady.
The central bank currently maintains a policy rate of 2.25%, a level it has held since December after two consecutive quarter-point cuts in the latter half of 2025. Bank of Canada Governor Tiff Macklem has previously signaled that the current rate is likely at “about the right level” to keep inflation near the 2% target. While Macklem remains open to adjusting the rate if economic conditions shift unexpectedly, the prevailing sentiment among major financial institutions suggests a period of stability is ahead.
Economists from CIBC and other major banks are among those forecasting no further rate hikes or cuts in 2026. Avery Shenfeld, chief economist at CIBC, noted that it is standard for central banks to maintain a policy rate for a year or longer once they reach a neutral stance. He suggested that unless the economy faces a significant external shock, such as drastic shifts in trade policy or a market downturn, the “stand-pat” approach will likely define the Canadian monetary landscape for the foreseeable future.
