News report 🌐 Macro 🌍 Canada

TD Securities Forecasts Bank of Canada Rate Hold at 2.25% in October

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.

🕐 1 min read

1 assets impacted (Forex). Net bias: 0 Bullish, 1 Bearish, 0 Neutral. Strongest signal: CAD ↓ 4/10 (35% confidence).

📊 Affected Assets (1)

CAD
Bearish 🤖 35%
📅 Short-term 🌍 CA ✨ Inferred

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.

Catalysts
  • ▼ Anticipated 25bp rate increases in December and January
  • ▼ Monitoring of inflation breadth and growth data
Risk Factors
  • ▲ Market conviction for an October rate hike remains higher than TD Securities' forecast
  • ▲ Potential for inflation or growth data to force an earlier-than-expected policy shift
▼ Show FAQ (2) ▲ Hide FAQ
What is TD Securities' outlook for the Bank of Canada's October meeting?

TD Securities expects the Bank of Canada to hold rates steady at 2.25% rather than implementing a hike.

When does TD Securities expect the next rate increases?

They project 25bp increases in both December and January.

🎯 Key Takeaways

  • TD Securities expects the Bank of Canada to hold rates at 2.25% in October.
  • Analysts project 25 basis point hikes in December and January to reach the neutral range.
  • Policy decisions remain contingent on inflation breadth, growth data, and new tariff impacts.

📝 Executive Summary

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.

❓ FAQ

Why does TD Securities expect the Bank of Canada to hold rates?

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.