National Bank Sees Bank of Canada Starting Rate Hikes in Q4 But Possibility of Postponement to 2027 Is More Likely

12:15 PM EST, 01/20/2026 (MT Newswires) -- The Bank of Canada released the Q4 business outlook and the consumer expectations surveys on Monday, said National Bank of Canada.

These reports will have no impact on the coming BoC decision as the BoC has already firmly established itself on the sidelines, noted the bank.

However, some of the trends in these reports bear monitoring, stated National Bank. On one hand, the bank will be assessing if improving sentiment and a stronger sales outlook will translate into faster gross domestic product growth.

On the other hand, the reported layoff intentions are concerning and raise the risk of the recent labor market recovery stopping in its tracks. Still lingering cost pressures will also be key to watch, pointed out National Bank.

For now, there's nothing that will have policymakers rushing to tighten or loosen monetary policy for the foreseeable future, according to National Bank. While the bank continues to see a path to rate hikes beginning in Q4, it will readily concede that risks to this call are skewed towards tightening being pushed into 2027 rather than being pulled earlier this year.

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