Bank of Canada Expected to Hold Interest Rates Steady as Trade Risks Loom

The Bank of Canada is expected to keep its key interest rate unchanged through 2026, according to a recent poll of economists. The outlook reflects a cautious approach as policymakers weigh easing inflation against persistent risks to economic growth.

Surveyed analysts said global trade conditions remain the biggest threat to Canada’s economic outlook. Ongoing uncertainty around international demand, supply chains and geopolitical tensions could weigh on exports, which are a major driver of the Canadian economy.

While inflation has shown signs of moderating, economists believe the central bank will prioritize stability and avoid premature rate cuts. Holding rates steady is seen as a way to support price control while monitoring how trade developments affect growth and employment.

The Bank of Canada has signaled it will remain data dependent, with future policy decisions tied closely to inflation trends, labor market conditions and external economic shocks. Markets are now largely pricing in an extended pause in monetary policy rather than near term adjustments.