Will Bank of Canada Hike rates by 25bps at their October 2026 meeting? — Hike 25bps

- [2026-09-02] Bank of Canada held its policy interest rate at 2.25% (Bank Rate 2.5%, deposit rate 2.20%) for a seventh consecutive decision, citing inflation risks from Middle East conflict-driven oil prices and new US tariffs/Canadian counter-tariffs following breakdown of trade talks. The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Source: https://www.bankofcanada.ca/2026/09/fad-press-release-2026-09-02/ - [2026-09-02] The Bank explicitly flagged upside inflation risk but stopped short of signaling a near-term move: Despite stressing higher inflation risks, the bank reiterated that the uncertain outlook prevents any clear signals on monetary policy this year. Source: https://tradingeconomics.com/canada/interest-rate - [2026-09-02] The next scheduled rate announcement is confirmed as October 28, 2026, alongside a new Monetary Policy Report: The next scheduled date for announcing the overnight rate target is October 28, 2026. The Bank's next MPR will be released at the same time. Source: https://www.bankofcanada.ca/2026/09/fad-press-release-2026-09-02/ - [2026-09-16] The Bank's summary of deliberations for the September decision showed Governing Council was worried that inflation risks had risen: Inflation risks had also increased. With inflation having been above the 2% target for several months and likely to remain above the target in the near term, members agreed that the risk that inflation spreads to other goods and services had risen. Source: https://www.bankofcanada.ca/2026/09/summary-of-governing-council-deliberations-fixed-announcement-date-of-september-2-2026/ - [2026-09-16] Deliberations also noted rising global bond yields tied partly to concerns over U.S. sovereign debt, with some spillover into Canadian yields — a factor markets are watching ahead of October. Source (via reporting): https://www.moneysense.ca/news/bank-of-canada-interest-rate-october-predictions/ - [2026-09-18] Market-implied odds for the October 28 meeting have swung dramatically: In the days leading up to each of the Bank of Canada's six meetings so far in 2026, financial market odds have overwhelmingly been in favour of rate holds. Before the central bank's Sept. 2 decision to leave the policy rate unchanged, odds of a hold were pegged at 94 per cent... With over a month to go until the Bank of Canada's next decision on Oct. 28, markets now see that meeting as a coin flip. Odds have fluctuated sharply over the past few weeks, but stood narrowly in favour of a hike as of Thursday afternoon. Source: https://www.bnnbloomberg.ca/business/economics/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-18] Capital Economics' Stephen Brown gave a base case against a hike but called it close: "Our base case is that the bank will not hike in October, though it will likely be a close call," he said. Source: https://www.bnnbloomberg.ca/business/economics/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-21] Reporting confirms economist split: RBC's Fan and Desjardins' Bartlett both expect the Bank of Canada will remain on the sidelines for the rest of the year before delivering a rate hike in the first quarter of 2027 , while acknowledging bond-market pricing had shifted toward a possible October hike, largely reflecting elevated oil prices tied to the Iran conflict. Source: https://www.moneysense.ca/news/bank-of-canada-interest-rate-october-predictions/ - [~2026-08-31] A Reuters poll of bank economists found near-unanimity against an immediate hike: all 35 economists forecast a hold at 2.25%, but National Bank and Scotiabank predict a 50-basis-point hike by December. Among Canada's six largest banks, four — BMO, CIBC, RBC, and TD — forecast the policy rate holding at 2.25% through December 2026, with hikes beginning in 2027 if growth proves sustained. National Bank/Scotiabank instead project the Bank will move to 2.50% in October 2026 and 2.75% before year-end. Source: https://www.techtimes.com/articles/326070/20260831/bank-canada-holds-wednesday-two-banks-forecast-october-hike-lock-wait.htm - [2026-08-31 pricing] Ahead of the September decision, bond-market pricing (per nesto/LSEG) showed a high probability of no change, with roughly a 1% implied chance of a 25 basis point increase, and about a 32% implied chance of a cut by the October 28 meeting — illustrating how far sentiment has since shifted toward a possible hike by mid-September. Source: https://www.financecalendar.com/bank-of-canada-rate-decisions/ - [Upcoming, before Oct 28] Key data releases before the October decision include a Canadian CPI report around Oct. 19 and the Bank's own Business Outlook/Canadian Survey of Consumer Expectations, plus additional labour market and GDP data, which Capital Economics expects to show deteriorating confidence and rising short-term inflation expectations. Source: https://www.moneysense.ca/news/bank-of-canada-interest-rate-october-predictions/ ; https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast - [2026-09-21] August labour data showed weakness (a 42K job loss vs. expectations of a gain, unemployment steady at 6.4%, wage growth slowing to 2.0%), a disinflationary signal that could argue against a hike. the World Cup ended, and the August labour market is back to displaying this economic factor's true colours — with a 42K job loss when at least 15K had been expected. The unemployment rate remained at 6.4%... August wage growth dipped again to 2.0% from last month's 2.8%. Source: https://www.truenorthmortgage.ca/blog/mortgage-rate-forecast BOTTOM LINE: As of September 22, 2026 the policy rate has been held at 2.25% for seven straight meetings, and while market-implied odds moved from near-zero to roughly a coin flip on oil/inflation risk, the clear majority of bank/economist forecasts (RBC, TD, BMO, CIBC, Desjardins, Capital Economics) still expect a hold on October 28, with only National Bank and Scotiabank forecasting a hike; no hike has occurred yet and the decision remains a "close call" pending CPI, labour and BoC survey data due before the meeting. NOT FOUND: No confirmed, dated real-time OIS/swap-market probability figure for the October 28 meeting as of September 22, 2026 (only qualitative "coin flip, narrowly favoring hike" language from Sept. 18 reporting); no post-September-21 data releases (e.g., a specific September CPI print) were found dated within the last few days.

- [2026-09-02] The Bank of Canada held its policy rate at 2.25% for a seventh consecutive meeting, marking the current record: "With the economy and inflation evolving broadly as forecast in the July Report, Governing Council decided to leave the policy interest rate unchanged at 2.25%." https://www.bankofcanada.ca/2026/09/summary-of-governing-council-deliberations-fixed-announcement-date-of-september-2-2026/ - [2026-09-18] Historical base rate for 2026: "In the days leading up to each of the Bank of Canada's six meetings so far in 2026, financial market odds have overwhelmingly been in favour of rate holds. Before the central bank's Sept. 2 decision to leave the policy rate unchanged, odds of a hold were pegged at 94 per cent" — i.e., every 2026 meeting to date resolved "hold," a 0/7 base rate for hikes this year. https://www.bnnbloomberg.ca/business/economics/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-18] The reference class shifted abruptly for October: "With over a month to go until the Bank of Canada's next decision on Oct. 28, markets now see that meeting as a coin flip... concerns that inflation could become a more persistent thorn than first thought have some pencilling in a tightening cycle to start in early 2027." https://www.bnnbloomberg.ca/business/economics/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-17] Quantitative market pricing (OIS/swaps): "As of 17 Sept 2026, overnight index swap pricing implies a 50% probability the Bank of Canada hikes at the 28 Oct 2026 rate announcement, with a market-implied move of +13 bp from the current overnight rate of 2.25%." https://www.bluegamma.io/central-banks/central-bank-interest-rate-forecasts/the-bank-of-canada-interest-rate-forecast - [2026-09-09] A separate bond-market summary (nesto/LSEG-based) put slightly different but comparable odds: "Bond markets put the odds of a 25-basis-point hike on October 28 at 52%, against 48% for a hold. The odds shift by December 9, which falls after another inflation report and the Bank's October Monetary Policy Report, and markets imply 99% for a hike by then." https://www.nesto.ca/mortgage-basics/bank-of-canada-interest-rate-schedule/ - [2026-09-18] Economist consensus remains more skeptical than market pricing: "While many economists remain unconvinced that the central bank will raise the cost of borrowing this year, concerns that inflation could become a more persistent thorn than first thought have some pencilling in a tightening cycle to start in early 2027." https://www.bnnbloomberg.ca/business/economics/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-08] Bank-side forecasts (TD Securities, National Bank) point to a hike starting later than October: "TD Securities said in August 2026 that it expects the overnight rate to stay at 2.25% through 2026 before two 25 basis point increases take it to 2.75% in 2027, and National Bank has published a similar path." https://www.financecalendar.com/bank-of-canada-rate-decisions/ - [2026-09-14] A related Polymarket contract ("Bank of Canada Rate Hike in 2026?") shows: "The current crowd-sourced probability is 67% for 'Yes.'... The Bank of Canada's September 2 decision to hold its policy rate at 2.25% for a seventh consecutive meeting, paired with September 16 minutes underscoring elevated near-term inflation risks... forms the main driver behind the 66.5% market-implied probability of a rate hike in 2026." Note this is a broader "any 2026 meeting" market (Oct or Dec), not October-specific, so it should be somewhat higher than the October-only probability. https://polymarket.com/event/bank-of-canada-rate-hike-in-2026 - [2023-01-25 historical reference] The last time the BoC hiked after signaling a possible pause/hold was during the 2022-23 tightening cycle; even then, moves were largely pre-signaled and consensus-aligned: "The 25-basis-point increase was in line with analysts' expectations." This illustrates that historically, BoC hikes have rarely come as a surprise against strong prior consensus for a hold — the current near-coin-flip pricing is unusual. https://www.aljazeera.com/economy/2023/1/25/bank-of-canada-hikes-rates-first-major-bank-to-signal-pause - [2026-09-01 approx] Process context: the BoC has held 8 fixed-date meetings/year and this would be only the second hike cycle since the 2022-2023 tightening episode; the Bank has not hiked since January 2023, a gap of over three and a half years, per "the full rate cycle: pandemic-era floor → fastest hike cycle in a generation → nine consecutive cuts to the neutral range." https://fxmacrodata.com/articles/bank-of-canada-cad-easing-cycle-outlook BOTTOM LINE: The base rate for a BoC hike specifically at the October meeting is highly unusual by 2026's own track record (0-for-7 holds all year) and by the longer historical pattern of the Bank rarely hiking against near-even market odds without more overt pre-signaling; but current market-implied probability (swaps ~50%, bond-market pricing ~52%) shows a genuine coin-flip that is unprecedented in this cycle, reflecting a real but not yet dominant probability of Yes. NOT FOUND: No direct Kalshi-specific historical base rate data for this exact contract type; no confirmed post-September-18 update on how the coin-flip odds moved into the final weeks before the meeting (data after 2026-09-18 not available in search results).

- [2026-09-22] Fresh Yahoo Finance/Money.ca reporting (dateline today) frames the BoC's hold streak as "treading into precarious territory," noting "traders now see the meeting as close to a coin flip, tilted slightly toward a hike as of Thursday, according to BNN Bloomberg" , and explicitly links the shift to "the U.S. Federal Reserve's own move Wednesday, delivering its first rate hike in more than three years to fight inflation south of the border" — a new cross-border spillover mechanism not previously flagged. https://ca.finance.yahoo.com/news/traders-put-bank-canada-october-111500996.html - [2026-09-17] Quantitative OIS pricing (BlueGamma) shows the swap-implied probability of an October hike at exactly 50%, with a market-implied move of "+13 bp from the current overnight rate of 2.25%" — precise numeric confirmation of the "coin flip" language. https://www.bluegamma.io/central-banks/central-bank-interest-rate-forecasts/the-bank-of-canada-interest-rate-forecast - [2026-09-09] Scotiabank Economics dated this rapid momentum shift concretely: as of that Wednesday, "Rate markets are pricing a full 25-basis-points Bank of Canada rate hike by December, with odds of an October move at around one-in-three, according to Scotiabank Economics in a Wednesday note, citing the Overnight Indexed Swap" , rising to ~50% just over a week later (Sept 17) — a roughly 17-point jump in ~8 days, showing accelerating hawkish repricing rather than a static coin flip. https://www.bitget.com/news/detail/12560605813178 - [2026-09-09] Scotiabank tied this directly to commodities beyond oil: "Higher oil and broader commodity prices, including the BoC's commodity price index that excludes energy, are adding to pressure on Canada's central bank to lift rates as soon as its Oct. 28 meeting" , indicating the inflation-risk case is broadening past gasoline alone. https://www.bitget.com/news/detail/12560605813178 - [~2026-09-03] Post-decision reporting (Posthaste/National Post via Yahoo) quantified the earliest post-meeting pricing: "Markets are currently pricing in just over a 40 per cent chance of a rate hike in October" , meaning odds have climbed from ~40% right after the Sept. 2 hold to ~50% by mid-September — a consistent upward trajectory over three weeks. https://ca.finance.yahoo.com/news/posthaste-markets-predict-three-bank-120026898.html - [~2026-09-03] The same reporting notes forward-looking hawkish positioning beyond October: "Scotiabank expects the Bank of Canada to hike rates to 2.75 per cent by year-end and to three per cent in 2027" , and Desjardins' Mendes conceded "swap investors don't have it completely wrong... Mendes is calling for 50 basis points of rate hikes in the first half of next year" — even a hike skeptic sees the tightening case as directionally correct, just mistimed. https://ca.finance.yahoo.com/news/posthaste-markets-predict-three-bank-120026898.html - [2026-09-02] CBC reporting on the decision day quantified the oil shock driving the case: "U.S. benchmark oil prices have soared about 13 per cent since the bank's last announcement in July... resulting in slower tanker traffic through the Strait of Hormuz, a critical maritime passageway for oil to reach global markets" , and Scotiabank's Derek Holt argued Macklem "very clearly cracked open the door by enough to increase flexibility to tighten as soon as the next meeting if everything co-operates" . https://www.cbc.ca/news/business/boc-decision-sept-2026-9.7328101 (via cached search result) - [2026-09-14] August CPI data (Statistics Canada) shows headline inflation stuck at the top of the Bank's control range for two straight months, and — critically for the hike case — core inflation excluding gasoline actually rose: "inflation excluding gasoline rising to 2.4% from 2.2%, since the Bank has been treating the headline overshoot as an energy story that would fade... An energy shock becoming broader is precisely the risk it named in September" . https://www.nesto.ca/featured-articles/inflation-rate-cpi-in-canada/ - [2026-09-14] TD Economics' own read of the same CPI print concedes the direction, if not the magnitude: "Inflation held at the top of the Bank of Canada's 1-3% control range in August... the Bank of Canada's (BoC) core inflation measures started to drift a bit above 2% in August as higher energy costs start to drive price increases in other areas of the economy" — even a bank forecasting a 2026 hold acknowledges the leading indicator the BoC would need to justify a hike is moving in that direction. https://economics.td.com/ca-cpi - [2026-08-31] The pre-existing hawkish forecasters' full rationale: National Bank and Scotiabank's break from consensus is explicitly built on "National Bank and Scotiabank break sharply from that view, with their October and December forecasts both projecting the Bank will move to 2.50% in October 2026 and 2.75% before year-end. That split tracks a deeper disagreement about which of the three current crises should drive the Bank's decision calculus" — i.e., these banks weight the Iran/oil inflation shock above the trade-war growth risk that the majority weights more heavily. https://www.techtimes.com/articles/326070/20260831/bank-canada-holds-wednesday-two-banks-forecast-october-hike-lock-wait.htm - [2026-09-16] The Bank's own summary of deliberations (already flagged by colleagues) gives the explicit trigger conditions Capital Economics later cited: the Bank is "unlikely to increase rates at its October policy meeting unless September's consumer price index unexpectedly exceeds expectations or oil prices climb sharply" — meaning the YES path is narrow but well-defined and testable against the Oct. 19 September CPI release, still nine days before the meeting. https://www.bitget.com/news/detail/12560605843755 - [2026-09-22, current] Crude oil (WTI-linked contract) is trading at approximately $91/barrel intraday, sustaining the elevated-energy narrative that underpins the entire hike case, even as it has pulled back slightly from recent highs (-1.29% on the day per live quote). https://ca.finance.yahoo.com/news/traders-put-bank-canada-october-111500996.html BOTTOM LINE: The single most credible YES path is a further upside surprise in the September CPI (due Oct. 19) or a fresh spike in oil/Strait-of-Hormuz risk, which two of Canada's six largest bank forecasters (National Bank, Scotiabank) already treat as their base case and which OIS/swap pricing has moved to price at roughly even odds (50%) as of mid-September, up sharply from ~40% right after the September hold and ~33% a week earlier — a fast-moving, data-dependent momentum trade rather than a settled consensus. NOT FOUND: No OIS/swap probability update dated after September 21, 2026; no confirmation of the September CPI release (due October 19, per StatCan) since it has not yet occurred; no direct statement from Governor Macklem after September 18 specifically pre-committing to or ruling out an October hike.

**Strongest evidence for NO (no 25bp hike at Oct 28, 2026 meeting):** - [2026-09-14] Core inflation — the BoC's own preferred gauges — remain essentially at target even as headline CPI holds at 3.0%: core inflation rates tracked by the Bank of Canada remained close to their target, with the trimmed-mean core rate and the median core rate both unchanged at 1.9% and 2%, respectively, aligned with expectations . This is the single strongest data-based case against a hike: the metric the Bank actually targets shows no broadening of inflation. - [2026-09-14] TD Economics, reading the same CPI print, explicitly rejected the market's hike pricing as unjustified: the 2-Year Government of Canada bond yield had risen over 40 basis points over the past month as markets moved to price in interest rate hikes from the Bank of Canada this year, but TD does not think today's inflation report supports this degree of tightening, since core inflation is likely to move up only off a very low level and remain within the BoC's comfort zone . - [2026-09-21] CIBC's Avery Shenfeld argues directly against an October move, citing domestic slack and tariff drag rather than global oil: CIBC Capital Markets says the Bank of Canada has room to hold rates steady into 2027, putting it at odds with growing market expectations for another rate increase as early as next month, because Canadian core inflation measures remain close to the Bank's 2% target, excess capacity should keep pressuring prices downward, and tariffs launched in August would trim about a half-percent from economic growth over the coming year . - [2026-09-21] Macklem's own Halifax remarks — often cited as hawkish — are actually two-sided and non-committal, explicitly warning against overreacting: Macklem said that while officials don't want to hike borrowing costs if prices remain contained, the conflict in the Middle East has increased the risk that inflation stays elevated and broadens, but "we don't want to raise our policy rate and restrain growth if inflationary pressures are contained. But nor do we want to be too slow to respond if inflationary pressures are becoming more persistent" . He also flagged a growth shock that argues against tightening: the Bloomberg report notes Macklem said policymakers don't want to be late to hike, but only "should inflationary pressures prove to be stubborn" — a conditional, not a commitment. - [2026-09-21] The Halifax speech also revealed a material downside-growth risk from tariffs that argues for caution: Macklem said Q4 growth "could be roughly halved... to below 1%" if the new US tariffs remain in place, undercutting the case for tightening into a slowing economy. - [2026-09-22] Oil, the proximate driver of the market's swing toward pricing a hike, has been retreating for four straight sessions ahead of the meeting: Brent crude fell to around $100 a barrel on Monday, extending losses for a fourth session as traders focused on diplomatic efforts to de-escalate the US-Iran conflict and signs that oil and LNG shipments through the Strait of Hormuz remain resilient . By September 22, Brent crude futures were down 69 cents at $99.65 a barrel, with prices down more than 3% this week after Trump told the United Nations he believes Iran will make a deal after the midterm elections . Macklem's own conditional framing (hike risk hinges on oil staying "near $100") is thus already being undercut by a real-time price retreat and diplomatic de-escalation signals, six weeks before the decision. - [2026-09-21] Trump's UN comments suggesting Iran will eventually negotiate, plus Saudi Arabia restarting its East-West pipeline, both point toward easing (not worsening) of the oil-supply shock that is the entire basis for the hike case, per Bloomberg's Sept 22 oil-market recap. - [2026-08-31/09-18] The broader, longer-standing professional consensus remains against a hike: a majority of economists expect the Bank to hold at 2.25% through the rest of 2026, and among Canada's six largest banks, four — BMO, CIBC, RBC, and TD — forecast the policy rate holding at 2.25% through December 2026, with hikes beginning in 2027 if growth proves sustained . Only two of six major bank desks (National Bank, Scotiabank) dissent, an asymmetry that has not changed since August. - [2026-09-01 reference] A separate Reuters-consensus tracking piece shows economists positioned even further out than "2027 hikes beginning": the Reuters consensus sees the first BoC hike only in Q4 2027, and among economists who provided a forecast, fewer than half expect even one increase by the end of Q2 2027 — a materially more dovish read than market-implied swap pricing, reinforcing that the "coin flip" is a market/trader phenomenon, not an economist one. - [2026-09-18] Capital Economics — the most-quoted independent shop on this question — maintains a base case of no hike despite acknowledging the closeness of the call, and separately (per Bitget's Sept report) argues that even in a hike scenario the total tightening needed would be more modest than swap markets imply, given the tariff drag on demand. - Mechanism/technicality: the question requires a discrete 25bp hike specifically on Oct 28; even the pro-hike camp (National Bank/Scotiabank) forecasts 2.50% in October as part of a path to 2.75% by December, meaning any "hike" outcome would already be consistent with forecasters' base cases, but this remains a minority (2 of 6 major bank shops) view against a majority holding at 2.25% through year-end. BOTTOM LINE: The NO case rests on three convergent facts newer than the coin-flip market pricing: (1) core inflation (CPI-trim/median) sits right at the Bank's 2% target despite the 3% headline, undercutting the "inflation broadening" rationale; (2) Brent crude — the specific trigger cited by Macklem and Governing Council — has fallen roughly 12-15% from its early-September peak toward $100 amid Trump-Iran diplomatic overtures, actively eroding the oil-driven case for a hike in the six weeks before the meeting; and (3) a clear majority of bank/economist forecasters (BMO, CIBC, RBC, TD, Capital Economics, Reuters consensus) still expect a hold, with CIBC's Shenfeld and TD Economics explicitly arguing current market pricing for tightening is unjustified by the data. NOT FOUND: No swap/OIS probability reading dated after September 18 (the most recent hard number found is the Sept. 17 ~50% OIS-implied probability); no September 2026 GDP or the pending Oct. 19 September CPI print (releases after Sept. 22 that could move the calculus were not yet available); no direct Kalshi-specific pricing data for this contract.