The Bank of Canada is expected to raise its policy rate at its next two meetings as the conflict in the Middle East increases the risk of broader inflationary pressures. Bloomberg News reports this, citing Manulife strategist Dominique Lapointe.
Manulife is thus changing its previous forecast of an unchanged interest rate through the end of the year, with hikes not coming until mid-2027. Core inflation has increased, while the bank is also considered to view the trade conflict with the US as a smaller obstacle to tightening.
The policy rate has been at 2.25 percent since October 2025.
