Bank of Canada Meeting

Governor Tiff Macklem raises borrowing costs for first time since July 2023.

Download Full Report Here: https://media.marketnews.com/BOC_Review_Oct2026_859707693f.pdf * The BOC delivered a widely expected 25bp overnight rate hike to 2.50% at its October meeting. The communications kept the door open to further tightening, but emphasized optionality, with the terms "no predetermined path" and "one meeting at a time" making multiple appearances in the post-meeting press conference. * The opening statements cast a slightly dovish note, noting the Governing Council "will proceed carefully" "given uncertainties", suggesting a follow-up hike in December is in the balance - though overall kept the door open to more hikes. * The updated macroeconomic projections were notably more hawkish than the prior edition, providing the main basis for taking action now, with big upgrades to CPI and, to a lesser extent, GDP growth expectations. * To our ear, Senior Deputy Governor Rogers concluded the press conference by implying that the main reason the BOC is taking a meeting-by-meeting approach is that there could be major changes in circumstances, including a conclusion to the Middle East conflict. * Assuming those changes in circumstance don't come to pass, the next hike could come at the next meeting in December, but that could depend on incoming data in the meantime. A follow-up hike is currently priced at a little better than 50% probability, with the overall path a little more hawkish (111bp of tightening through Sept 2027 vs 105bp pre-decision) though that's due in part to a broader global rate move.