Scotiabank, RBC, and TD weigh in after the Bank of Canada’s fifth consecutive rate hold – and what a “watch and wait” stance means for mortgage borrowers
The Bank of Canada (BoC) held its policy rate at 2.25 per cent on June 10, 2026 – its fifth consecutive hold. Derivatives markets had put overwhelming odds on that outcome ahead of the decision, with many participants pricing in a hold through most of 2026. Economists at Scotiabank, RBC, and TD Economics all responded within hours.
What Scotiabank’s Derek Holt said
Scotiabank economist Derek Holt said the BoC offered nothing new. In his view, the central bank is in monitoring mode – avoiding overreaction to any single development and seeking clarity on key risks to the inflation outlook. The overall communications were in line with expectations.
Holt also argued the Bank is overplaying trade policy risks. He points to roughly 90% Canada–United States–Mexico Agreement (CUSMA) compliance and Canadian dollar depreciation into a growing US economy as reasons why export volumes remain resilient. He described the June 10 statement as a placeholder, with four more Bank of Canada rate decisions remaining in 2026.
What RBC’s Claire Fan said
RBC senior economist Claire Fan kept her assessment of the Bank’s position steady. Fan wrote that Governor Tiff Macklem used neutral, factual language when describing downside data surprises, and kept the view on economic slack relatively unchanged from April 2026.
On oil prices, Fan noted the Bank of Canada appears more concerned about the inflationary impact than the effect on household purchasing power. RBC’s own consumer spending data continues to track resilience, with limited signs of reduced purchases of non-energy items.
RBC expects the Bank of Canada to remain on hold for the rest of 2026 before hiking moderately in 2027. This forecast is consistent with what several economists predicted ahead of a rocky summer.
What TD’s Andrew Hencic said
TD Economics director and senior economist Andrew Hencic pointed to the growth backdrop as the key context for the June 2026 rate hold. He noted that GDP came in well below the Bank’s last projections, leaving significant slack in the economy. That slack is expected to help offset inflation pressures from higher energy costs. Whether that’s enough depends on how long oil prices stay elevated.
Hencic also flagged CUSMA negotiations between Canada and the US as a separate source of uncertainty, noting that talks have yet to begin. “Given the competing forces on inflation, we expect the Bank of Canada to stay on hold through the balance of the year,” he said.
| Economist | Bank | Rate outlook | Key risk flagged |
|---|---|---|---|
| Derek Holt | Scotiabank | Hold; watching H2 data and commodities | Energy price pass-through to core CPI |
| Claire Fan | RBC | Hold through 2026; hike moderately in 2027 | Uneven impact of oil prices across regions |
| Andrew Hencic | TD Economics | Hold through balance of 2026 | Duration of elevated oil prices; CUSMA uncertainty |
The rate outlook for mortgage borrowers
Governor Macklem confirmed CPI inflation reached 2.8 per cent in April, driven by higher global oil prices. Another factor was the removal of the Canadian consumer carbon tax falling out of the 12-month comparison. Core inflation measures have moved down to around 2 per cent, with limited evidence of broad-based pass-through from energy costs to other consumer prices.
For mortgage professionals, all three economists point to the same near-term reality: the prime lending rate remains at 4.45% through 2026.
The July 2026 Monetary Policy Report is the next scheduled update, when the Bank will revise its forecasts with fresher data. Incoming second-half GDP and inflation figures will determine whether the competing risks shift enough to prompt a move before the year is out.
For more on what’s shaping the Canadian mortgage market in 2026, visit CMP’s mortgage industry trends section.
