CIBC Sees Bank Of Canada Holding Rates Through 2026 As October CPI Eases Slightly

10:45 AM EST, 11/17/2025 (MT Newswires) -- Canadian inflation eased modestly in October, although only partly offsetting the pick-up seen in the previous month, said CIBC.

With headline inflation remaining slightly above the 2% year-over-year target, and with core measures continuing to average firmer than that, Monday's data support the view that the Bank of Canada will hold interest rates steady not just at the December meeting but into 2026 as well, stated CIBC.

The 0.2% month-over-month non-seasonally adjusted increase in headline prices during October -- 0.1% month over month after seasonal adjustment -- saw the year-over-year pace ease to 2.2% from 2.4% in September. However, that was a little firmer than expected as consensus was 2.1% year over year and only partly offset the prior month's acceleration (year-over-year inflation was 1.9% in August).

While headline inflation decelerated in October, the move was only broadly in line with expectations and it would take a longer period of easing price pressures, combined with indications of economic growth deteriorating again, to bring the Bank of Canada back off the sidelines, added CIBC. The bank continues to forecast no change in the overnight rate through to the end of next year.

Bond yields and the Canadian dollar (CAD or loonie) were little changed following Monday's release, according to the bank.

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