Commerzbank Doesn't See Reasons for Bank of Canada to Change Rates on Wednesday

07:38 AM EST, 01/28/2026 (MT Newswires) -- Wednesday's interest rate decision at 9:45 a.m. ET should be straightforward for the Bank of Canada, said Commerzbank.

There is little to suggest a BoC change in interest rates, wrote the bank in a note.

Last year, the BoC lowered interest rates to 2.25%, which is slightly into expansionary territory, and the real economy now appears to be recovering slowly from the shock of United States tariffs, stated Commerzbank. Although job growth was weaker in December, strong growth in previous months offset significant job losses shortly after the U.S. tariff announcement.

At the same time, inflationary pressure has recently increased again, with inflation now approaching 2.5% year-on-year, rather than remaining below 2%.

In short, interest rate cuts are gradually helping the real economy, and inflation also argues against further cuts, according to the bank.

However, as this has now been fully priced into markets, the policy decision is likely to have only a small impact on the Canadian dollar (CAD or loonie), added Commerzbank.

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