Central bank makes fifth rate announcement of 2026 as uncertainty over inflation and economic outlook continues
The Bank of Canada has held interest rates steady in its latest decision, leaving its benchmark rate unchanged amid continuing uncertainty over the economic outlook.
The central bank announced this morning that it was keeping that trendsetting interest rate, which directly impacts variable mortgage rates, at its current level of 2.25%. That marks the fifth consecutive rate hold in a row, a streak that began in December and has continued through 2026.
That decision was widely expected by economists, financial markets and mortgage market watchers. The US-Israel war on Iran has stoked fears of an inflation upsurge because of soaring oil prices, while the Canadian labour market has proven unexpectedly resilient and added 88,000 jobs last month.
The mortgage industry, too, viewed a rate hold as the likeliest outcome of the Bank’s meeting. In a Canadian Mortgage Professional survey of brokers this week, 89% said they expected no change today, with just 3% suggesting a rate hike was imminent and 8% anticipating a cut.
The news means no change for Canadian homeowners on variable mortgage rates and borrowers holding home equity lines of credit (HELOCs), while bond yields are unlikely to shift significantly – likely meaning a similar picture for fixed rates.
What will BoC governor Tiff Macklem reveal at today’s press conference?
While the rate hold comes as no surprise, of greater interest could be Bank of Canada governor Tiff Macklem’s remarks to the media this morning. Financial markets will be keeping a close eye on that press conference to see whether Macklem gives any indication of the central bank’s likely path forward in the months ahead.
Macklem is expected to strike a careful tone on the outlook and emphasize the Bank’s focus on keeping inflation in check while also keeping labour market conditions in mind.
For now, markets see the likeliest outcome as a protracted rate freeze by Bank decisionmakers until the end of 2026 – although much will depend on the duration of the conflict in Iran, and whether the opposing sides can thrash out an agreement to end the war.
The Bank is scheduled to meet four more times this year: on July 15, September 2, October 28, and December 9.
Stay tuned to CMP for all the reaction today from the Bank of Canada’s decision, including its likely impact on the housing and mortgage markets and how mortgage professionals are viewing the news.
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