Bank of Canada Expected to Lift Rates to 2.50% in October
Economists surveyed by Reuters forecast two more Bank of Canada rate hikes, bringing the benchmark to 2.50% by October 28 and higher by March.
The Bank of Canada is widely expected to raise its benchmark interest rate to 2.50% at its October 28 policy meeting, according to a Reuters poll of economists — a move that would mark another significant step in the central bank's aggressive campaign to tame inflation that has run well above target.
Beyond October, the survey consensus points to at least one additional hike before the end of March, suggesting that policymakers in Ottawa are not yet prepared to pause even as higher borrowing costs begin filtering through the broader economy. The back-to-back increases reflect a central bank that views the inflation fight as unfinished, even at the risk of slowing growth.
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The projected trajectory puts the Bank of Canada among the more hawkish major central banks globally, alongside the U.S. Federal Reserve, which has similarly signaled a commitment to restrictive policy until price pressures clearly ease. For Canadian households carrying variable-rate mortgages — a notably large share compared with American homeowners — each incremental hike translates quickly into higher monthly costs, amplifying the real-economy impact of tighter monetary conditions.
What makes the Bank of Canada's position analytically interesting is the tension it must manage: inflation demands higher rates, yet Canada's housing-heavy economy is particularly sensitive to rate increases. Whether policymakers can engineer a soft landing, or whether successive hikes tip the country into a sharper slowdown, will define the central bank's legacy from this tightening cycle.
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