Capital Economics analyst Bradley Saunders said that even amid talk of a
technical recession, he expects the BOC to remain hawkish on rate-hike options
to curb inflation risks. Saunders expects the BOC to leave the policy rate
unchanged on Wednesday and not to alter rates before 2026. He said hawkish
rhetoric is likely to persist given uncertainty from the Iran war and the risk
of sustained high energy prices. Saunders added that initiating hikes would
require Canada to clear a "big hurdle" — a trade deal with the US that preserves
USMCA integrity and possibly provides tariff relief for manufacturing.
