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

- [2026-09-02] The Bank of Canada held its overnight rate target at 2.25% for a seventh consecutive decision (Bank Rate 2.5%, deposit rate 2.20%), citing broadening economic recovery (Q2 GDP growth of 3.3%) but flagging increased upside inflation risk from persistently high gasoline prices amid the Middle East conflict and new US tariffs/Canadian countermeasures. 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%. This decision was framed around two risks pulling in opposite directions: persistently high oil prices and spillover into other goods and services, while new US tariffs and Canadian countermeasures make growth prospects less certain. Source: bankofcanada.ca - [2026-09-04] Statistics Canada's August Labour Force Survey showed employment falling 42,000 (vs. an expected gain of ~15,000), with wage growth slowing to 2.0% y/y from 2.8% in July — data leaning toward a hold rather than a hike. Source: nesto.ca - [2026-09-16] The Bank of Canada published its summary of deliberations for the September decision. On Wednesday, September 16, 2026, the Bank of Canada published a summary of the deliberations that took place ahead of its interest rate decision on September 2, 2026. Source: bankofcanada.ca - [2026-09-22] As of this date, the policy rate remains 2.25%, unchanged since the October 2025 cut. The Bank of Canada has held its interest rate at 2.25% since October last year. Source: moneysense.ca - [2026-09-24 (as of report)] The two remaining 2026 scheduled announcements are October 28 (with Monetary Policy Report and press conference) and December 9 (standard announcement, no MPR/press conference). The next Bank of Canada interest rate announcement is Wednesday, October 28, 2026... and the year's final decision follows on Wednesday, December 9. This is a standard announcement, without a Monetary Policy Report or a scheduled press conference. Source: nesto.ca / octagonai.co - [2026-09-24] Bond/money-market pricing shows a near-coin-flip for a 25bp hike at the October 28 meeting, and near-certainty of a hike having occurred by December 9. 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. Source: nesto.ca - [2026-09-24] Despite hawkish market pricing, most bank economists still expect the rate to remain on hold through year-end. Most bank economists do not expect the Bank of Canada to raise its policy rate on December 9, 2026, although money markets are pricing in a partial increase for that decision. Money markets carry a partial increase for the December 9 decision and price in roughly 100 basis points of increases over the coming 12 months, while most bank economists still see the policy rate frozen at 2.25% through the end of 2026. Source: nesto.ca - [2026-09-24] A separate market-tracking source (Octagon) frames the December 9 base case as a hold at 2.25%, with prediction markets currently assigning low odds to any change (a minority chance of a cut, minimal chance of a hike). The base case for the Bank of Canada's December 9, 2026 meeting is a hold at 2.25%. Bank of Canada likely maintains rates, supported by major bank consensus as of September 2026. Prediction markets currently indicate low probabilities for significant changes, such as a 24% chance of a 25 basis point cut and a 5% chance of holding rates [figures inconsistently reported across sources]. Source: octagonai.co - [2026-10-14 / 2026-11-10 / 2026-12-10] Key CPI releases scheduled before and immediately after the December decision. Statistics Canada will release two Consumer Price Index (CPI) reports for the final quarter of 2026, scheduled for October 14, 2026, and November 10, 2026...An additional Statistics Canada CPI release is slated for December 10, 2026, occurring one day after the Bank of Canada's decision. Source: octagonai.co - [2026-09-21] Governor Tiff Macklem delivered a speech ("Navigating uncertainty and adapting to change") in Halifax, part of ongoing communications ahead of the October/December decisions; no new policy signal beyond existing "readiness to adjust monetary policy as needed" stance. Source: bankofcanada.ca - [2026-09-09] Independent trackers confirm the December 9, 2026 meeting is a standard, non-MPR announcement, distinguishing it from the October 28 MPR-accompanied decision — meaning any December move would come without fresh quarterly projections. Source: nesto.ca BOTTOM LINE: As of September 24, 2026, the BoC has held its rate at 2.25% for seven straight meetings, with the September decision explicitly flagging higher inflation risk but no hike; most bank economists' base case remains a hold through December 9, while some money-market pricing has leaned toward a hike materializing by year-end — but this pricing is inconsistent across sources and not corroborated by the Bank's own guidance, which offers no explicit tightening signal. NOT FOUND: No official Bank of Canada statement or economist consensus explicitly forecasting a December 9, 2026 hike; no confirmation of the exact current Kalshi/market-implied probability for the "Hike 25bps" outcome specifically (sources cited conflicting money-market hike probabilities of 52%, 99%, and separately a 24% cut/5% hold framing that appears inconsistent, likely reflecting different data vintages or methodologies).

- [2026-09-24] Reference class: BoC has held its overnight rate at 2.25% for seven consecutive decisions since the last move (a cut) on October 29, 2025; the Bank of Canada held its policy interest rate at 2.25% on September 2, 2026, a seventh consecutive hold, and the rate has not changed since the cut on October 29, 2025. https://www.nesto.ca/mortgage-basics/bank-of-canada-interest-rate-schedule/ - [2026-09-02] Historically, BoC hiking cycles are rare and clustered: the last hiking cycle ran March 2022–July 2023 (10 hikes), followed by holds and then 9 consecutive cuts from mid-2024 to Oct 2025 — the bank responded by raising interest rates 10 times in 2022 and 2023, bringing the policy rate to 5%, then reversed course in summer 2024 and cut nine times over the next year and a half. A reversal from a multi-quarter cutting/holding regime straight to a hike (the scenario needed for Dec 2026) has no precedent in this cycle and is a low-base-rate event generally. https://www.theglobeandmail.com/topics/bank-of-canada/ - [2026-09-24] Base rate of "hold" outcomes in 2026 so far: 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 Sept. 2 decision, odds of a hold were pegged at 94% , illustrating how dominant the "hold" base rate has been all year prior to the recent inflation scare. https://boereport.com/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-18] That base rate shifted materially in September: with over a month to go until the Oct. 28 decision, markets now see that meeting as a coin flip, with odds fluctuating sharply but narrowly favouring a hike as of Thursday afternoon. https://boereport.com/2026/09/18/odds-of-an-interest-rate-hike-from-bank-of-canada-this-year-have-jumped/ - [2026-09-09] Sell-side base case per Scotiabank Economics: rate markets are pricing a full 25-basis-point BoC hike by December, with odds of an October move at around one-in-three, according to Scotiabank Economics, citing OIS pricing. https://www.bitget.com/news/detail/12560605813178 - [2026-09-09] Nonetheless most bank-economist forecasts still lean toward inaction at the December meeting specifically: most bank economists do not expect the Bank of Canada to raise its policy rate on December 9, 2026, although money markets are pricing in a partial increase for that decision. https://www.nesto.ca/mortgage-basics/bank-of-canada-interest-rate-schedule/ - [2026-09-23] Current OIS-derived market pricing (RateProbability, using CORRA OIS forwards) shows the implied post-meeting rate for Dec 9, 2026 at 2.61% (vs. 2.25% today), with a cumulative "probability of hike" reading of 48.8% and an implied 1.43 cumulative hikes priced in between now and December (i.e., roughly even odds of at least one 25bp hike having occurred by then, split across the Oct 28 and Dec 9 meetings). https://rateprobability.com/boc - [2026-09-17] An independent market-pricing tracker (BlueGamma), also OIS-based, reported 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% — consistent with roughly half the tightening being priced for October rather than waiting for December. https://www.bluegamma.io/central-banks/central-bank-interest-rate-forecasts/the-bank-of-canada-interest-rate-forecast - [2026-09-2x] Retail prediction markets show similarly elevated but sub-even odds for a hike specifically in 2026: the current crowd-sourced probability is 79% for "Yes" [any hike in 2026], as elevated headline inflation near 3% in August 2026, driven by sustained high global oil prices, has lifted market-implied odds of a Bank of Canada rate hike in 2026 to 82%. This is a broader "any hike in 2026" market, not specific to the December 9 meeting outcome. https://polymarket.com/event/bank-of-canada-rate-hike-in-2026 - [2026-09-19] A separate aggregator (Octagon) describes the base case for the December 9, 2026 meeting itself as a hold, noting the base case for the Bank of Canada's December 9, 2026 meeting is a hold at 2.25%, supported by major bank consensus as of September 2026 , while flagging that a hike is a plausible tail scenario "from persistent inflation above target or resilient economic indicators." https://www.octagonai.co/markets/economics/global-central-banks/bank-of-canada-decision-in-dec-2026 BOTTOM LINE: The historical base rate for a BoC hike at any single meeting is low (roughly one hiking cycle per decade, and none since mid-2023), and bank-economist consensus still leans toward a December hold; but money-market (OIS) pricing has moved unusually far toward pricing in a hike by year-end (roughly a coin-flip on cumulative tightening by Dec 9), driven by a recent hawkish shift and an oil-price-driven inflation scare — so this is a rare instance where the outside view (base rate) argues for "No" while current market pricing argues for something closer to even odds, with October's meeting likely to pre-empt or reduce the odds of a December move if a hike happens then instead. NOT FOUND: A precise, single authoritative OIS-implied probability isolated to the Dec 9, 2026 meeting alone (as opposed to cumulative probability across Oct 28 and Dec 9); could not access the full Globe and Mail article (paywalled) or a fresh boereport.com fetch for additional detail on the "coin flip" framing.

**Strongest YES case: Oil-driven inflation persistence forces the BoC into a "catch-up" hike by December 9, following (or in lieu of) an October move.** Prerequisites: (1) global oil prices stay near/above $100/bbl through Q4, keeping headline CPI pinned near or above 3%; (2) core measures (CPI-trim/median) begin drifting above 2% as the energy shock broadens into other categories; (3) the Bank either hikes in October and telegraphs more, or holds in October explicitly citing the need to wait for one more data point before moving in December. - [2026-09-21] Governor Macklem, in a Halifax speech and press conference, stated "As things stand now, if oil prices stay near $100 per barrel, we would expect inflation to edge up in the coming months," and framed the live policy question as whether the current 2.25% rate "will bring inflation back to the 2% target, or whether they need to raise the interest rate to get there." This is the Bank's own governor, on record two days ago, explicitly not ruling out a hike. - [2026-09-21] Bloomberg reported the same speech under the headline that Macklem "flags risk of delaying rate hike too long," stating Bank of Canada Governor Tiff Macklem said policymakers don't want to be late to hike interest rates should inflationary pressures prove to be stubborn... the conflict in the Middle East and higher gasoline prices have increased the risk that inflation stays elevated and broadens. - [2026-09-18] The U.S. Federal Reserve itself broke a multi-year pause: "The U.S. Federal Reserve broke its own stand-pat stance and delivered the United States' first rate hike in more than three years on Wednesday in an effort to rein in inflationary pressures bubbling up south of the border." This gives the BoC external cover/precedent for a parallel move and has already repriced Canadian rate-hike odds sharply. - [2026-09-18] Market pricing for the *next* BoC meeting (Oct 28) flipped from near-unanimous hold to a coin flip: 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... 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. If October is a hold (data-dependent wait-and-see), December becomes the "catch-up" meeting. - [2026-09-10] Scotiabank Economics, one of Canada's six largest banks, made a hike its explicit base case: The Bank of Canada is expected to begin raising interest rates with a 25-basis-point hike in December, according to Scotiabank Economics in a note. Although an October rate increase remains possible, it is not Scotiabank's base case. Scotiabank cites "Strong second-quarter growth, upward first-quarter revisions, firmer consumption and rebounding exports" plus "higher oil prices... boosting incomes and adding a temporary inflationary impulse" as the mechanism. - [2026-08-31] National Bank independently converged on the same call: National Bank and Scotiabank predict a 50-basis-point hike by December... with their October and December forecasts both projecting the Bank will move to 2.50% in October 2026 and 2.75% before year-end. Two of the Big Six now have a December hike (or a hike already banked by December) as their formal call. - [2026-09-02] The Bank's own September policy statement already showed markets pricing in tightening: "Financial markets had three quarter-point hikes baked into their forecasts by mid-2027 as of Wednesday at noon — including one before the end of 2026 — according to LSEG Data & Analytics." - [2026-09-21/23] Oil remains structurally elevated even after a pullback: Brent "fell 3.4% to settle near $100 a barrel as Saudi Arabia increased crude shipments through the Strait of Hormuz" , and a separate tracker notes "Brent crude holding above $100 per barrel since March and cumulative export losses approaching 2.8 billion barrels" — the underlying Hormuz/Iran-war supply shock that is the core mechanism for the Bank's inflation-risk warnings has not resolved, only moderated slightly, leaving upside inflation risk intact into the October/December data cycle. - [2026-09-14] Even with headline CPI flat, the "spillover" the Bank fears is already visible: core measures stayed near the 2% target, with CPI-trim at 1.9% and CPI-median at 2.0%, while inflation excluding gasoline rose to 2.4%... An energy shock becoming broader is precisely the risk it named in September. A continuation of this trend in the October 14 and November 10 CPI reports would hand the Bank a clean justification to hike on December 9. - [2026-09-19] Even after the Kalshi "Hike 25bps" contract for December fell sharply, it did not go to zero: Octagon's tracker shows the contract still priced at "a significant likelihood" of some move, with the raw distribution showing "the implied probability of a 25 basis point (bps) hike in December plummeting 60 percentage points to 32%" — i.e., markets still assign roughly a one-in-three chance to this exact outcome even after the dovish repricing, and combined tightening scenarios (hike at Oct or Dec) remain live. - [2026-09-22] A broader retail market on "any hike in 2026" (not December-specific) still shows elevated odds: "Elevated headline inflation near 3% in August 2026, driven by sustained high global oil prices from the Middle East conflict, has lifted market-implied odds of a Bank of Canada rate hike in 2026 to 82%... overnight index swaps reflect expectations of one or more 25-basis-point moves before year-end." If the October meeting is used as a "wait for one more CPI print" hold, December is structurally the more likely single meeting to deliver that priced-in move given no October MPR-less December meeting typically defers to data, but Macklem's rhetoric suggests urgency rather than patience. BOTTOM LINE: The YES case rests on a live, escalating oil/Hormuz inflation shock that Macklem himself has openly flagged as risking a "too late" policy error, a Fed hike precedent, and two major bank economist teams (Scotiabank, National Bank) with formal December-hike calls — a substantive break from the otherwise dominant "hold" consensus, giving the December 9 meeting a genuine, evidence-backed (if still minority) path to a 25bp hike, especially if October's meeting is used as a hold-and-wait rather than the hike itself. NOT FOUND: No official BoC forward guidance explicitly committing to a December hike; no post-September-21 economist note updating Scotiabank/National Bank's call in light of oil's pullback to ~$100; could not confirm the live current Kalshi "Hike 25bps" contract price as of September 24 (only the September 19 Octagon snapshot at 32%).

- [2026-09-21] Even amid the September hawkish repricing, two major-bank economists directly interviewed (RBC's Claire Fan and Desjardins' Randall Bartlett) explicitly said they expect the BoC to remain on hold through year-end and only hike in Q1 2027, not at the December 9 meeting itself: "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" was the market view, but the named economists' own base case was later hold. Capital Economics' Stephen Brown similarly stated his own base case: "Our base case is that the bank will not hike in October, though it will likely be a close call" — implying December is even less likely to be the first move given data/MPR sequencing. Source: moneysense.ca - [2026-09-18] Bond-market odds have been "overwhelmingly in favour of rate holds" at every single one of the BoC's six 2026 meetings prior to September, with hold odds as high as 94% ahead of the September 2 decision — meaning the current hawkish repricing is a sharp, recent, and so-far unprecedented departure from a full year of consistently correct hold pricing. "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: bnnbloomberg.ca - [2026-08-31] A Reuters poll taken just three weeks before the current pricing shift found unanimous 35-of-35 economist consensus for a hold, and even among the minority forecasting eventual hikes, the timeline extended out to Q2 2027 rather than pinpointing December 2026: "all 35 economists forecast a hold at 2.25%, but National Bank and Scotiabank predict a 50-basis-point hike by December" — meaning only 2 of 6 major banks, not the consensus, back any 2026 hike at all. Source: techtimes.com - [2026-09-2x] Even the two hawkish outlier banks (National Bank and Scotiabank) built their hike calls on the assumption the first move lands in October, with December simply extending an already-started tightening cycle — meaning if October disappoints (holds), the mechanical case for a December hike weakens further rather than being independently supported. "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." Source: techtimes.com - [2026-09-2x] Four of Canada's six largest banks (BMO, CIBC, RBC, TD) — the clear majority — forecast the policy rate holding at 2.25% through December 2026, with any hikes pushed into 2027, confirming the sell-side base case has not converged toward a December hike despite money-market repricing. "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." Source: techtimes.com - [2026-09-2x] Updated September publications from TD, BMO and CIBC still show no hike anywhere in their forecast horizon through 2026 (and in TD's case, through 2027 or even 2031), directly contradicting the market-implied pricing colleagues cited. "In a September 2026 publication, BMO Capital Markets expects the overnight policy rate to stay at 2.25% through the end of 2027." "In a September 2026 publication, TD Economics expects the policy rate to stay at 2.25% through the end of 2027." Source: wowa.ca - [2026-09-2x] A separate mortgage-rate forecaster's roundup independently corroborates that TD, CIBC, RBC and BMO — "the largest banks" — expect the overnight rate to stay at 2.25% for the remainder of 2026, with one advisor assigning only a 15% probability to any hike materializing even in 2027. Source: rates.ca - [Mechanism] The December 9 meeting is explicitly a standard, non-MPR announcement with no fresh quarterly economic projections and no scheduled press conference — a structural feature the BoC itself has historically used as a reason to avoid major policy shifts (holds are the norm at non-MPR meetings, and a hike absent updated staff forecasts would be an unusual break from that pattern); this is corroborated on the Bank's own event calendar, which designates October 28 (not December) as the next MPR/press-conference decision. Source: bankofcanada.ca - [Mechanism] Bank of Canada's own summary of September deliberations (published Sept 16, previously reported) shows the Governing Council characterizing the oil-driven inflation risk as one to "monitor" rather than act on, and Governor Macklem's own July language ("We will not let higher oil prices become persistent inflation") was a statement of intent to act only if core/persistent measures move — and as of the July data cited, core CPI-trim/median sat at 1.9%/2.0%, still at target, undercutting the technical justification needed for an actual hike. Source: bankofcanada.ca (deliberations), techtimes.com - [2026-09-24] Rising Government of Canada bond yields (tied to U.S. Treasury/Fed dynamics) are already tightening Canadian financial conditions without any BoC action, a mechanism explicitly cited by Desjardins' Bartlett as giving "the bank... wiggle room... because some of the tightening of financial conditions is being done for it" — reducing the practical need for the BoC to hike even if inflation risk remains elevated. Source: moneysense.ca - [Sequencing] With two meetings remaining (Oct 28 MPR-backed, then Dec 9 standard), the base case articulated by Capital Economics and echoed elsewhere is that any first move, if it comes, is more likely to occur at the October MPR meeting when the Bank has fresh projections and a press conference to explain a change — leaving December as a "confirmation/pause" meeting rather than the venue for an initial hike, which historically is not how the BoC has operated (first moves accompany MPRs, not standard announcements). Source: moneysense.ca, techtimes.com BOTTOM LINE: The weight of sell-side economist consensus (4 of 6 major Canadian banks, and the unanimous 35-of-35 Reuters poll as recently as late August) still forecasts no BoC hike in 2026, core inflation remains at target even as headline is oil-driven, and December 9's non-MPR, no-press-conference format historically disfavors a first policy move — all arguing for NO despite recent, volatile money-market repricing that has not yet been validated by an actual Bank action or communicated guidance. NOT FOUND: No BoC official statement or speech explicitly signaling a December hike; no confirmation of Kalshi's own current implied probability; could not verify whether National Bank/Scotiabank have revised their hike calls in light of the September 2 hold or September Labour Force Survey weakness (employment -42,000) noted by colleagues.