MNI BoC Review-Dec 2025: Data Seen Solid, But Not Yet Material
Dec-10 16:36By: Tim Cooper
Canada
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EXECUTIVE SUMMARY
- As largely expected the BOC produced a fairly neutral appraisal of the economy and rate outlook alongside the unanimously-expected overnight rate hold at 2.25%.
- The market reaction to the decision release was slightly dovish (about 2-3bp of implied hiking taken out of the path over the next 7 meetings), reflecting the Statement's downplaying of recent upside surprises in macro data developments.
- The post-meeting press conference saw little further shift in rate expectations, with Gov Macklem acknowledging the resilience in the Canadian economy evident in the latest data, but highlighting that it “hasn’t fundamentally changed our view”.
- Coming out of the meeting, markets price in 25bp of cumulative hikes through the October 2026 meeting, vs 27bp prior, with the path through H1 2026 almost completely flat.
- Attention turns to two key data releases to round out the year: November CPI (December 15) and October GDP (December 23), with the December labour report (January 9) and CPI (January 19) the key releases ahead of the Bank of Canada’s next decision on January 28 (1bp of cuts priced).
- See PDF report for:
- MNI View
- MNI Instant Answers
- Press Conference Transcript
- BOC Meeting Links
- Policy Statement Changes
