Desjardins Still Sees Bank of Canada on Hold Throughout 2026 After Wednesday's Monetary Decision

10:43 AM EST, 12/10/2025 (MT Newswires) -- Desjardins said the Bank of Canada decision to keep its benchmark interest rate steady on Wednesday didn't come as much of a surprise, given the guidance provided last meeting, and as such doesn't change the Desjardins view that the central bank will remain on hold throughout 2026.

Developments since the last Monetary Policy Report haven't changed the Governing Council's views on growth, with members continuing to believe the current policy rate is appropriate to provide some support for the economy through this period of transition, noted Desjardins.

It noted central bankers acknowledged the labor market was showing some signs of improvement and that employment in trade-exposed sectors had been more stable. However, it also noted, uncertainty will likely keep hiring intentions muted across the economy.

Overall, policymakers appear somewhat wary about taking the recent Labour Force Survey (LFS) at face value, said Desjardins, noting the BoC continues to view underlying inflation around 2.5% but also indicated that upward pressures from ongoing supply chain reorientation should roughly offset the drag from economic slack.

Desjardins added it will be monitoring the labor market, the breakdown of GDP growth, and how the BoC communicates trade-related cost pressures in upcoming communications.

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