Market update
The Bank of Canada held its key interest rate at 2.25 percent on September 2, 2026, the seventh consecutive hold since its last cut on October 29, 2025. Governor Tiff Macklem pointed to rising oil prices from the Middle East conflict and new Canada-U.S. tariffs as the biggest risks to inflation, even as Canada's economy grew 3.3 percent annualized last quarter. Overnight and variable-rate borrowing costs stay put, but the five-year Government of Canada bond yield, the one that actually prices a fixed mortgage, already jumped to as high as 3.43 percent the same day, its highest level since 2024.
Key takeaways
- Seventh straight hold. The rate has sat at 2.25 percent since October 2025, unchanged at every meeting since.
- Oil, not tariffs, is the bigger worry. Governor Macklem said the Iran conflict's effect on oil prices is a larger inflation risk than the new tariffs.
- Canada's countertariffs haven't started yet. The U.S. imposed 50 percent tariffs on a range of Canadian goods on August 22. Canada's dollar-for-dollar response on $27.6 billion of U.S. goods doesn't take effect until September 8, six days after this decision, not before it.
- The economy is growing. GDP expanded 3.3 percent annualized last quarter, and inflation sits at 3 percent, above the Bank's 2 percent target.
- Economists are split on what comes next, and one call stands out. Scotiabank's Derek Holt is calling for at least 75 basis points of hikes starting this fall, the most aggressive forecast among the major banks. Bond markets moved to price in a wider 75 to 100 basis points the same day. Desjardins and Capital Economics also lean toward a hike, later and smaller. Rosenberg Research and KPMG expect a long hold with any move more likely to be a cut. CIBC isn't calling it either way.
Side by side: where each outlet says this is headed
Six outlets covered the same decision Wednesday morning. They agreed on the fact and disagreed on the framing. Here is each one's actual headline, stance, and takeaway, so you can weigh them for yourself rather than take any single one as the read.
| Outlet | Framing | Key takeaway for readers |
|---|---|---|
| The Globe and Mail "BoC holds rate steady, suggests oil shock more concerning than trade war" |
Hawkish | The Bank sounded more worried about oil-driven inflation than about the trade war. Original analysis, a live blog, and an opinion piece arguing the hold was the Bank's only real option given the trade breakdown, even though the underlying data alone might have supported a hike. |
| CBC News "Inflation risks rise with higher fuel costs and new U.S. tariffs, Bank of Canada governor warns" |
Cautionary | Led with Governor Macklem's inflation warning rather than the hold itself. Framed rising oil prices and the still-unresolved Middle East conflict as the bigger near-term risk to Canadians than the new tariffs. |
| Global News "Bank of Canada holds key rate at 2.25 per cent once again" |
Steady, expected | Treated the hold as the widely-anticipated outcome it was. Put more weight on the trade file than oil, noting the new tariffs could delay business hiring and investment decisions even as GDP grew 3.3 percent last quarter. |
| Financial Post "'Hawkish' Bank of Canada has some economists pulling forward calls for rate hikes" |
Two-sided | Didn't take its own position. Instead let five different bank and independent economists make the case, landing everywhere from a near-term hike to a future cut. The most useful single source for seeing the actual range of expert opinion. |
| Toronto Star "Bank of Canada holds key interest rate at 2.25%, cautions inflation is 'too high'" |
Cautionary | Original reporting, not wire copy. Reporter Ana Pereira's framing lands close to CBC's: the hold was expected, and the Bank's communication on inflation is the actual news, enough that some analysts moved their hike forecasts up. |
| CTV News "Bank of Canada holds key rate at 2.25% as tariffs, Iran war cloud outlook" |
Neutral, wire | Ran the Canadian Press account of the decision. Straightforward reporting of the facts, without an independent editorial lean of its own. |
Three headlines lead with the hold itself: Global News, CTV, and the Star. Three lead with something else: CBC opens with the inflation warning, the Globe opens with the oil-versus-trade framing, and Financial Post skips the hold entirely for what economists think happens next. An even split. None of the six predicted a cut. Not one outlet's coverage suggested the Bank's next move is more likely to be easing than tightening, even though two of the six economists in the forecast table below still call for exactly that.
What the forecasters think comes next
The decision itself was unanimous among economists going in. A Reuters poll taken August 22 found all 35 participants surveyed expected the hold. What they disagree on is what happens at the next meeting, October 28, and beyond, and the spread runs wider than a single wire story suggests.
| Economist / firm | Call |
|---|---|
| Derek Holt Scotiabank |
The most hawkish call by far. Scotiabank has forecast year-end tightening since November 2025 and says the Bank's communications "reinforce conviction" in that view: at least 75 basis points of hikes starting Q4 2026 into early 2027. Calls October 28 a "live" meeting. Bond markets went further the same day, pricing in 75 to 100 basis points of tightening by next summer: the two-year Government of Canada yield rose about 8 basis points and the loonie firmed roughly half a cent within hours of the announcement. |
| Royce Mendes Desjardins |
Hold through year-end, then a 50 basis point hike to 2.75 percent in the first half of 2027. Desjardins' own note called staying on the sidelines "the right decision," while cautioning the trade war will likely weigh on growth more than the Bank seems to expect. |
| Stephen Brown Capital Economics |
Reads the Bank's statement as more hawkish, pointing to language that changed from rates "remain appropriate" to the Bank being ready to adjust as needed. Says he will likely need to pull his first-hike forecast forward from where it currently sits, the second quarter of 2027, though he hasn't published a new date yet. |
| David Rosenberg Rosenberg Research |
The dovish outlier. Expects a hold for some time to come, citing weak labour demand and tightening financial conditions, with the bias leaning toward an eventual cut rather than a hike. |
| Ali Jaffery KPMG Economics |
Expects the Bank to stay on hold all the way until the end of 2027. If it moves at all before then, he thinks the odds favour a cut, since growth risks still outweigh inflation risks. |
| Avery Shenfeld CIBC |
Declined to commit either way, writing that trade uncertainty is too clouded right now "to be definitive about what lies ahead." |
Three firms now lean toward the next move being a hike, with Scotiabank the most convinced. One firm leans toward a cut. One expects nothing to change through 2027. CIBC isn't calling it. The hold was never in question. The direction of the next move is.
What this means for Georgian Bay
Overnight and variable financing costs have sat still for close to a year, which is real, useful stability for anyone budgeting a purchase in Midland, Penetanguishene, Tiny, Tay, or Wasaga Beach. But if you're planning around a five-year fixed, that stability isn't the story right now. The bond market that actually prices a fixed mortgage moved today, and the assumption a lot of buyers have been carrying, that the next rate move is down, isn't the consensus it looked like a few months ago. If you have a mortgage renewing in the next year, this is the week to look at your options rather than assume next year looks like this year.
Thinking about a move in Georgian Bay this fall? Send me a message and we can talk through exactly what these numbers mean for your street, your timeline, and your specific home. If you have a home to sell, I can also put together a free, no-obligation valuation.
Frequently asked questions
Did the Bank of Canada raise interest rates in September 2026?
No. The Bank of Canada held its key interest rate at 2.25 percent on September 2, 2026, the seventh consecutive hold since its last cut on October 29, 2025.
How many times has the Bank of Canada held its rate since its last cut?
Seven times. The Bank of Canada has held its policy rate at 2.25 percent at every meeting since its last cut on October 29, 2025, most recently on September 2, 2026.
Could the Bank of Canada raise rates at its next meeting?
Scotiabank's Derek Holt called the Bank's October 28, 2026 meeting "live" for a hike in a note published the same day as the hold. There is no consensus on this: other major bank economists expect the Bank to stay on hold well into 2027.
Are economists predicting the Bank of Canada's next move will be a hike or a cut?
They disagree, and the range is wide. Scotiabank's Derek Holt is calling for at least 75 basis points of hikes starting this fall, with bond markets pricing in as much as 100. Desjardins and Capital Economics also lean toward a hike, later and smaller. Rosenberg Research and KPMG Economics expect the Bank to hold well into 2027, and see a cut as more likely than a hike if the rate does move. CIBC has not committed to a direction either way.
Sources: CBC News, Global News, CTV News and The Canadian Press wire, the Toronto Star (Ana Pereira), The Globe and Mail (Mark Rendell), and Financial Post (National Post), which gathered several of the economist reactions in the forecast table above. Derek Holt's forecast and the same-day bond market figures are sourced directly from Scotiabank Economics' Scotia Flash note. Royce Mendes' forecast is also confirmed against Desjardins' own economic study. Read the full CBC News report, the Global News report, or the Financial Post economist roundup for full detail.
Keep reading: Find out what your home is worth · The last time the Bank held its rate, July 2026 · Is now the right time to buy or sell in Midland?
By Jonathan Wallace, REALTOR®, Faris Team Real Estate, Brokerage. 705-433-2525. News coverage summarized above reflects reporting from the outlets linked and is provided for general information only, not financial or legal advice. Figures are aggregated board statistics for Simcoe County and are approximate and subject to revision. Ask for current data for your specific area and property type before making a decision.