Canada’s Next Rate Move May Be a Hike

A major bank’s economists expected Canada’s central bank to hold steady near term, then begin gradual rate hikes in Early-Q1 2027 instead of cutting.
Early-Q3 GDP was flat after ~0.5% monthly gains through Early-Q2 to Late-Q2, adding downside risk to quarterly growth tracking near 2% pace.
Two forces shaped that view: US tariffs hit Canadian imports as a supply shock, while oil prices and refinery margins kept inflation concerns alive.
Consumer data looked sturdier than the GDP print, with hours worked up, job openings firm through Late-Q3, and retail activity also improving.
For Canada borrowers nearing renewal, that outlook suggested stable rates may not last, making fixed-versus-variable planning more important than waiting for easier borrowing.