On Wednesday, October 28, at 9:45 a.m. Eastern Time (6:45 a.m. in Vancouver), the Bank of Canada will announce its policy-rate decision and publish its quarterly Monetary Policy Report.
For some time, the prevailing expectation was that the Bank would hold its rate steady. In recent weeks, however, a possible increase has returned to the conversation. If the Bank raises the rate on Wednesday, it would be the first increase since 2023. That remains a possibility, not a decision already made.
Why has the market’s view shifted?
As of October 27, the Bank’s overnight-rate target had been unchanged through several consecutive decisions. In a Reuters survey conducted October 21–23, 19 of 34 economists expected an increase. That describes a forecast, not the Bank’s decision.
The main concern behind the change in expectations is inflation. Governor Tiff Macklem has warned that persistently high oil prices could allow price pressures to broaden and last longer.
The data also point in different directions. Statistics Canada reported that headline consumer prices rose 3.1% year over year in September. Among the Bank’s core measures, CPI-trim was 1.8% and CPI-median 1.9%, while CPI-common was 2.4%. It would therefore be inaccurate to say that every core measure was below 2%.
With inflation, growth and employment not sending one clear signal, the decision is unusually hard to call.
Even bank economists disagree
There is no firm consensus among major-bank economists either. According to a roundup of their views, National Bank and Scotiabank emphasized oil prices and forward-looking inflation risks. RBC viewed a modest hike as possible, but said a hold that preserves room to raise rates later was nearly as plausible.
TD expected the Bank to hold its rate, noting that planned business price increases had not yet passed clearly through to consumers. CIBC moved its hike forecast forward to October, while also acknowledging a case for waiting to see more evidence on oil prices and Canada–U.S. trade.
Hike or hold? For now, it is a close call.
What could this mean for your mortgage?
For most households, the practical question is whether their mortgage payment could rise.
Variable-rate mortgages generally have a more direct connection to changes in banks’ prime rates. Fixed-rate mortgage pricing is influenced by market factors such as bond yields and may move before the Bank announces a decision. As the Bank explains, its policy rate influences the broader short-term rate environment; it does not immediately set the price of every mortgage contract.
Recent increases in bond yields may already have affected some fixed mortgage rates. At the same time, a softer housing market, employment conditions and some core-inflation measures give the Bank reasons for caution. The outcome will only be known when the official October 28 announcement is released.
Guaranti Perspective: know your position, not just the forecast
No one can know the policy decision with certainty in advance. What households can review is their own financial structure. If you hold a mortgage or plan to buy, three questions are worth considering:
- Is your mortgage fixed or variable, and when is its next renewal?
- If payments rise over the next year or two, how would your household cash flow respond?
- Do you have enough liquid savings to manage changes in both rates and income?
The answers may matter more than guessing Wednesday’s decision, and they are closer to what you can control.
The direction of rates belongs to the central bank. Financial readiness belongs to the household.
Information checked October 27, 2026 (Vancouver time). At publication, the October 28 decision had not been announced. Forecasts reflect the views of the cited organizations at that time; the Bank of Canada’s official announcement is authoritative. This article is general information, not personal mortgage, investment, tax or legal advice.
First published on Guaranti’s WeChat account.