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Bank of Canada's Wednesday Policy Statement May Offer "Guarded" Optimism, Says Scotiabank

BY MT Newswires | ECONOMIC | 12/10/25 08:23 AM EST

08:23 AM EST, 12/10/2025 (MT Newswires) -- The Bank of Canada policy statement will appear at 9:45 a.m. ET on Wednesday, as well as Governor Tiff Macklem's opening remarks, said Scotiabank.

The press conference will be held at 10:30 a.m. ET on Wednesday, noted the bank.

Nobody expects the policy rate to change on Wednesday, stated Scotiabank. No change is priced until markets begin to seriously toy with a hike by summer into fall. Bets pick up around June through October and pricing is veering toward almost 50bps of hikes by October.

Scotiabank pointed out that it has been calling H2 2026 hikes since September. However, much of the move has been in a very short period of time, concentrated around the jobs report last Friday. Large gross domestic product revisions since 2022 that slashed estimates of slack could have motivated markets to have this view, but it took the third strong employment gain in a row to spark the move.

A great deal of uncertainty lies ahead into 2026, which cuts in both directions to the bank's expectations.

Scotiabank expects a shorter statement than October's one, which was accompanied by a Monetary Policy Report. A hawkish signal would be a sign the BoC views upside risk to its prior inflation projection in the October MPR. The BoC may choose to hold off on any such perspective until the next chance to launch a wholesale review of data, developments and fresh forecasts at the end of January 2026.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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