TD Securities strategists Robert Both and Emma Lawrence expect the Bank of Canada (BoC) to keep the overnight rate at 2.25% throughout 2026, despite markets pricing significant tightening. They argue higher energy prices linked to US strikes on Iran are a shock the BoC can largely look through, with policy normalization only starting in early 2027.

BoC seen sidelined despite market repricing

“We believe the Bank of Canada has reached the end of its easing cycle and look for them to