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Morgan Stanley Still Sees Bank of Canada's First Rate Hike in Q1 2027

BY MT Newswires | ECONOMIC | 12:31 PM EDT

12:31 PM EDT, 04/15/2026 (MT Newswires) -- The Bank of Canada delivered a dovish hold at its March policy meeting, said Morgan Stanley.

The January Monetary Policy Report laid out a range of scenarios for the CUSMA trade deal renegotiation, framing it as the key risk for the Canadian economy going forward.

The February jobs report was decidedly weak -- the Canadian economy lost 84,000 jobs and the unemployment rose by 25 bps to 6.71%.

Morgan Stanley stated it continues to expect the BoC to remain on hold this year and hike rates in Q1 2027. Considerable weakness in the labor market and consumption, persistence of the oil shock and downside risks from the CUSMA review have lowered the bar for cuts at the upcoming policy meetings.

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

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