Big Banks Project 2026 Interest Rate Path

The Bank of Canada announced interest rate cuts at four of its eight monetary policy meetings last year, resulting in a cumulative reduction of 100 basis points or 1% to its key policy rate, bringing it to 2.25%.

Some economists speculate the central bank is done with easing interest rates for the foreseeable future, while others suspect it will resume rate cutting at some point this year.

But where do Canada’s six big banks stand?

According to BNN Bloomberg, CIBC, RBC and TD Bank are predicting the Bank of Canada will leave rates unchanged throughout 2026, citing inflation risks, trade uncertainty, weak productivity and slowing population growth. However, CIBC says the central bank should lower interest rates further, while RBC says there is a risk of hikes this year.

BMO is expecting one or two cuts to bring the central bank’s key interest rate to 2% or 1.75%, though uncertainty around the Canada-United States-Mexico Agreement, or CUSMA, or a hike in oil prices could impact its forecast.

In contrast, both Scotiabank and National Bank of Canada are anticipating the Bank of Canada will raise interest rates by 50 basis points or 0.5% in the second half of 2026, to combat a rise in inflation. This would bring the policy rate back to 2.75%.