MNI BoC Preview-Dec 2025: Firm Hold, But Hike Talk Picking Up

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EXECUTIVE SUMMARY:

• The Bank of Canada’s easing cycle looks to be at an end, with markets overwhelmingly expecting a rate hold in December through the subsequent 4 meetings to mid-2026.
• Firmer-than-expected macroeconomic data since the October meeting has fuelled speculation that the BOC’s next move will be a hike and not a cut, with a 25bp increase fully priced by Q4 2026.
• With incoming data catching all observers off guard, it leaves open the possibility that the BOC could sound a little more cautious about its current rate stance than it did at the previous meeting, though MNI Markets (and consensus) expects the overall message to remain the same.
• In short, the BOC and Gov Macklem are likely to communicate that while activity and employment data have been more upbeat than anticipated, rates remain at “about the right level” and that it would take more material surprises to force a reconsideration.