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Nomura Sees Bank of Canada on Hold This Year

BY MT Newswires | ECONOMIC | 09:55 AM EDT

09:55 AM EDT, 03/11/2026 (MT Newswires) -- The Bank of Canada lowered the policy rate to 2.25% in October and has remained on hold since.

BoC Governor Tiff Macklem has argued that policy is well-positioned to keep inflation contained while supporting the economy, framing current weakness as more structural

than cyclical, said Nomura.

The bank believes growth and the labor market will recover gradually, and inflation will remain within the BoC's target range.

Against this backdrop, Nomura continues to expect the BoC to hold rates through 2026, with risks skewed modestly toward a hike, considering the policy rate remains at the lower end of the neutral-range estimate.

Notably, Deputy Governor Sharon Kozicki highlighted in a recent speech the need for policy to carefully respond to structural shifts, making the upcoming monetary policy framework review important for assessing how the BoC's reaction function evolves amid

developments such as Artificial Intelligence adoption, demographic changes, and geopolitical tensions.

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

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