MNI BoC Preview-Jun 2026: Holding Still The Right Thing To Do

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EXECUTIVE SUMMARY:

• The Bank of Canada is overwhelmingly expected by both markets and analysts to maintain its overnight rate for a 5th consecutive decision at 2.25% at the June meeting (announcement on June 10).
• Mixed activity data and an uncertain near-term geopolitical outlook make it likely that the BOC will also likely leave its message from the last meeting in April largely intact: potential upside in rates is greater than the downside at this juncture, but maintaining policy is still the “right thing to do for today” as uncertainty over trade and energy prices looms large.
• Rate markets imply a full 25bp hike by year-end, but the BOC has no real urgency to make a move given still-soft core inflation readings and possible paradigm-shifting developments from ongoing Canada-US-Mexico trade negotiations and US-Iran talks.
• Analysts remain nearly unanimous that the next move will be a hike rather than a cut, but the vast majority see a hold through the rest of this year with 50bp of increases in 2027. See table for more details.