TD Securities projects a Bank of Canada rate hold in October, diverging from market expectations for an immediate hike, as the central bank monitors growth data and tariff-related economic pressures.
TD Securities analysts Andrew Kelvin and Robert Both anticipate the Bank of Canada will maintain the current 2.25% interest rate in October, diverging from broader market expectations of a hike. This divergence suggests a less hawkish policy stance than currently priced in, which may exert downward pressure on the Canadian dollar as the market adjusts to the delayed tightening timeline.
TD Securities expects the Bank of Canada to hold rates steady at 2.25% rather than implementing a hike.
They project 25bp increases in both December and January.
TD Securities analysts expect the Bank of Canada to maintain its benchmark interest rate at 2.25% during the October meeting. The firm anticipates a more gradual tightening cycle, with 25 basis point hikes projected for December and January as policymakers assess inflation and tariff impacts.
TD Securities analysts believe the central bank will prioritize monitoring inflation breadth, economic growth data, and the potential impact of new tariffs before proceeding with further rate hikes.