CIBC Says Bank of Canada Gives No Signals as to What Next Moves May Be As Keeps Rates on Hold

10:14 AM EDT, 03/18/2026 (MT Newswires) -- The Bank of Canada's Wednesday decision to keep interest rates unchanged came as no surprise to markets, given the cross currents of a weak labor market, decelerating core inflation and the threat of an energy shock to inflation ahead, said CIBC.

The BoC still expects modest growth ahead, but weaker than it had previously expected in the near term, with "risks to growth tilted to the downside" but, on the other hand, with inflation risks having gone up due to the Iran war, noted the bank.

Canada's central bank wasn't due to make a new forecast, so it opted not to deliver one, and in the end, stayed neutral by saying that it is "ready to respond as needed" but giving no signal on which direction such a response might take, added CIBC.

In the opening statement for the press conference, the BoC put a bit more emphasis on some of the downside implications for growth from higher energy prices than on the boost to income from energy exports, citing financial conditions tightening and the squeeze on consumers, according to the bank.

Still, the BoC gave no indication that there was any debate on either cutting or hiking at this point, in line with its perspective that the implications of the energy price shock will depend critically on how long the conflict persists, pointed out CIBC.

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