CIBC Notes Slight Hint of Bank of Canada Concerns on Economic Growth From Trade Uncertainties

10:22 AM EST, 01/28/2026 (MT Newswires) -- There won't be anyone surprised by the Bank of Canada's well-telegraphed decision to keep rates on hold on Wednesday, or its assessment that rates are at the right level if its forecast pans out, said CIBC.

The BoC remains firmly neutral on where things go from here, saying that "it's difficult to predict the timing or direction of the next move,"noted the bank.

However, if there's a slight leaning here, it's still toward some worries on the growth front due to uncertainties on trade, and a bit more comfort that underlying inflation is decelerating, stated CIBC.

The BoC hasn't made any major changes in its Monetary Policy Report forecasts, with an upside surprise in Q3 offset by a stall in growth in Q4 of 2025. With both historical actual and potential growth revised higher, the output gap in Q4 is in the range of a 1.5% decline to a 0.5% contraction, unchanged from October's MPR estimate.

CIBC sticks to its forecast for no interest rate moves by the BoC this year, but sees the odds of a further cut as more likely than a hike, given the potential minefield in trade negotiations ahead, and a starting point that still has "significant" economic slack.

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