The Bank of Canada faces a decision Wednesday after September inflation edged higher and employment fell, while Rabobank expects policymakers to hold the overnight rate at 2.25%.
Christian Lawrence, Rabobank’s head of Americas and energy market strategy, and Molly Schwartz, a markets strategy analyst, made the call in the firm’s Oct. 24 preview. The document said overnight index swap pricing implied an 85% chance of a 25-basis-point increase. That estimate belongs to the dated preview, not a live market reading.
Market estimates also differed by date. The Canadian Press, citing LSEG Data & Analytics, reported a probability near 78% on Friday afternoon, Oct. 23. Those figures came from different reports and do not establish a like-for-like comparison.
The Bank held its target at 2.25% on Sept. 2. Its rate history shows the last change was a quarter-point cut on Oct. 29, 2025.
Statistics Canada reported that consumer prices rose 3.1% year over year in September, from 3% in August, led by gasoline, which was up 27.8%. The consumer price index excluding gasoline increased 2.2% year over year; shelter prices were up 1.8%.
Employment decreased by 68,000, or 0.3%, in September, and the unemployment rate rose 0.1 percentage point to 6.5%. At its previous rate announcement, the Bank cited subdued labor demand and continued excess supply in the economy. The data leave policymakers balancing higher headline inflation against weaker labor demand.
The Bank’s third-quarter business survey found most firms had spare capacity and hiring plans were subdued. Roughly three in four interviews were completed before Canada-U.S. trade talks failed and Canada announced new counter-tariffs.
The rate decision and the Bank’s Monetary Policy Report are scheduled for 9:45 a.m. ET Wednesday, Oct. 28. Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers are scheduled to hold a news conference at 10:30 a.m. ET.
