Mortgage Blog
Bank of Canada Rate Announcement - July 15, 2026
July 15, 2026 | Posted by: Crescent Mortgage Corp.
As expected, the BoC held its target for the overnight rate at 2.25% for a sixth consecutive decision.
It noted that Canada’s economy is showing signs of improvement and inflation is projected to ease gradually from its recent spike. However, risks and uncertainties due to the conflict in the Middle East and US trade policy continue to persist.
Financial conditions in Canada have improved since April and while US bond yields have risen, those in Canada have not changed as much. This differential has contributed to the depreciation of the Canadian dollar.
New tariffs, ongoing uncertainty and slower population growth has resulted in slowing GDP numbers. Labour market conditions remain soft as a result of economic slack. The unemployment rate was 6.5% in June and has not left the 6½%-7% range since the end of 2024.
It appears consumer spending continues to remain solid. Housing activity has been weak but looks to be steadying. Business investment is projected to pick up slightly, in most part due to the oil and gas sector. GDP is estimated to grow 0.7% in 2026 and the BoC projects growth rates of 1.8% in both 2027 and 2028.
CPI inflation rose again to 3.2% in May, driven by higher gasoline prices due to war in the Middle East. If we exclude gas prices, inflation was 2.2% and measures of core inflation remained close to the bank’s target rate of 2%. CPI inflation is expected to stay elevated in June but then begin to ease gradually over the next few months before returning to around 2% by early 2027. This forecast is highly sensitive on the hostilities in the Middle East ending in the near term.
“Uncertainty is still high. Governing Council will continue to assess the strength of the Canadian economy and the outlook for inflation and is prepared to adjust monetary policy as needed. The Bank is committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.”
The next interest rate announcement is scheduled for September 2, 2026.