Mortgage Blog
Bank of Canada Rate Announcement - September 2, 2026
September 2, 2026 | Posted by: Crescent Mortgage Corp.
The Bank of Canada once gain kept its target for the overnight rate at 2.25%, a seventh straight hold.
Uncertainty remains high at the conflict in the Middle East continues to keep energy prices high and the escalating trade war between the US and Canada remains fluid. Financial conditions have tightened as long-term bond yields have increased globally.
As predicted, Canadian economic activity strengthened in the second quarter. GDP was up 3.3% following a very weak first quarter number. Consumption showed solid gains and there was some rebound in housing activity. Labour market conditions have improved as the unemployment rate drop slightly to 6.4%. Overall, recent data seems to confirm the BoC’s view of a broadening recovery in Canada’s economy.
CPI inflation continues to hover around 3% due in large part to persistently higher gasoline prices. To date there has not much evidence of higher energy prices creeping into other components of inflation. Excluding gasoline, inflation was 2.2% in July and core inflation measures remained close to 2%. However, the longer that high oil prices and elevated refinery margins persist, the greater the risk of spread to the prices of other goods and services. New tariffs will also raise costs for some businesses and have the potential to bleed into consumer prices over time.
The upside risks to inflation have increased, while new tariffs make growth prospects more uncertain. As always, the BoC “remains committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.”
The next BoC interest rate announcement is scheduled for October 28, 2026.