RBC forecasts no Bank of Canada rate changes through 2026 amid resilient business expectations and subdued core inflation.
The Bank of Canada is likely to maintain current interest rates through 2026 as economic growth rebounds and core inflation remains subdued. RBC economist Claire Fan cited resilient sales and investment expectations in the Q2 2026 Business Outlook Survey despite earlier oil price shocks.
The survey, conducted in May, showed stable longer-term inflation expectations among businesses, even as rising energy prices lifted short-term price forecasts. Separate consumer data indicated energy costs are squeezing household spending plans, though overall economic activity is picking up after stagnation in late 2023 and early 2024.
With growth stabilizing and inflation pressures muted, the central bank faces little pressure to adjust rates in either direction. Markets have priced in steady policy as the most probable outcome for the foreseeable future.