TD Securities Forecasts Bank of Canada Rate Hold Through 2026, Hike in 2027

Economists at TD Securities, Robert Both and Emma Lawrence, project that the Bank of Canada will maintain its Overnight Rate at 2.25% throughout 2026. This forecast anticipates no rate changes for the remainder of this year and the next, signaling a period of monetary policy stability.

Looking ahead to 2027, TD Securities expects the central bank to raise the Overnight Rate to 2.75%, which they describe as a return to a neutral level. This suggests that policymakers may begin to tighten monetary conditions again after a multi-year pause.

For Japanese investors and traders, understanding shifts in Canadian monetary policy is important given the impact on the Canadian dollar and North American equity markets, which can influence forex and cross-border investment flows.