BoC rate hikes still unlikely despite market speculation, says BMO’s Porter

Despite market speculation spurred by spiking oil prices and ongoing international conflicts, BMO’s chief economist Doug Porter believes the Bank of Canada is unlikely to raise interest rates in 2026. Porter suggests that a prolonged hold on rates, or even cuts, would be more appropriate given the economic uncertainties and potential negative impact on the Canadian economy from global events. He also noted that tightening financial conditions, with rising bond yields and falling equity prices, mitigate the need for the BoC to hike rates as markets are already doing some of the work to control inflation.