Macquarie Economist Sees Bank on Canada on Hold This Week; Predicts Rate Hike Later in The Year

10:33 AM EDT, 03/17/2026 (MT Newswires) -- The Bank of Canada rate decision is scheduled for Wednesday at 9:45 a.m.ET.

David Doyle, head of economics at Macquarie Group, said his base case is for a hold with the Overnight rate likely to remain at 2.25%. Forward guidance may tilt slightly hawkish relative to January, reflecting greater concern on the inflation front due to the recent oil price spike.

Despite this, it should fall short of signaling a rate hike, noted Doyle.

The Macquarie economist listed what to watch for in Wednesday's policy statement and press conference:

-- Next policy move. Messaging here is likely to be similar to January. Governor Tiff Macklem stressed that elevated uncertainty made forecasting the timing of the next policy move particularly difficult. This was reinforced by the Summary of Deliberations which indicated "the need to maintain optionality in setting monetary policy."

-- Oil price spike and growth. The BoC is likely to stress the ambiguous impacts here. Upside comes from the positive potential impacts this could have on Canada's terms of trade and capital expenditures in the energy patch. Downside could come near-term from headwinds that will be created for growth from the impact of higher gasoline prices on household disposable income.

-- Inflation and inflation expectations. Recent data has shown clear improvement in underlying inflation. While encouraging, the recent oil price spike is likely to more than offset these developments for the forward-looking outlook.

Macquarie continues to see the next policy move as a rate hike, but suspects this will only come later this year in the context of labor market improvement and still elevated inflation.

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