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Growth, Trade Risks, Labor Slack to Keep Bank of Canada on Hold Through 2026, Nomura Says

BY MT Newswires | ECONOMIC | 06:34 AM EDT

06:34 AM EDT, 06/24/2026 (MT Newswires) -- The Bank of Canada is expected to look through May's energy-driven inflation, with economic growth and trade risks unlikely to push the central bank to change its policy stance this year, said Nomura.

At the June policy meeting, the BoC saw the inflation picture as stable, with improving growth and limited spillovers from higher energy costs, Nomura wrote in a note following Monday's consumer price index data.

"The May CPI details are consistent with that assessment," Ruchir Sharma and David Seif wrote.

Nomura forecasts the BoC to maintain its policy rate at 2.25% through 2026, given continued downside growth risks, especially linked to this year's U.S.-Mexico-Canada trade deal renegotiations, and lingering slack in the labor market.

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

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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