In the Monetary Policy Report released with its rate decision, the Bank of Canada raised its CPI forecast to 3.1% YoY in 2027 from a prior 2.0% projection. Governor Macklem said energy prices have risen and are expected to remain elevated and that cost pressures are building, citing those factors as the main rationale supporting further hikes and saying the scope for policy easing has narrowed. He added the bank had discussed holding rates; arguments for pausing included that the inflation picku

In the Monetary Policy Report released with its rate decision, the Bank of Canada raised its CPI forecast to 3.1% YoY in 2027 from a prior 2.0% projection. Governor Macklem said energy prices have risen and are expected to remain elevated and that cost pressures are building, citing those factors as the main rationale supporting further hikes and saying the scope for policy easing has narrowed. He added the bank had discussed holding rates; arguments for pausing included that the inflation pickup is concentrated in energy, the economy still has spare capacity, and a U.S. tariff dispute could slow growth. The governing council agreed future decisions will be made on a meeting-by-meeting basis. BOC officials also upgraded GDP growth forecasts, in part reflecting federal measures including a proposed productivity super-deduction and progress on large projects.