The Bank of Canada (BoC) is expected to raise its inflation forecast significantly this month, Governor Tiff Macklem said, citing high oil prices and Middle East tensions. The revised projections will be key to the October 28 rate decision. Macklem warned that disruptions to oil shipments and refinery damage raise the risk of inflation becoming broader and harder to control, though the bank remains committed to its 2% target and ready to adjust policy. Markets expect no rate change on October 28 or in December, but money markets price in about 100 basis points of hikes in 2027. WTI crude closed at $101.84 per barrel on October 16, up 3.95%.
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Related tickers and likely impact
USD/CAD
▼ Likely negativeRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 1.41389 |
| Change that session | -0.32% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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Bank of Canada Governor Tiff Macklem said the central bank will raise its quarterly inflation forecast considerably this month. He attributed the revision to persistently high prices for crude oil and petroleum products, which are intensifying inflationary pressures. The new inflation and growth forecasts will be factored into the bank's interest-rate decision on October 28.
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- Bank of Canada Macklem warns global resilience under strain
Bank of Canada Governor Tiff Macklem warned that persistently high global energy prices will push up Canada's inflation outlook, saying global resilience is “under strain” after a series of shocks, including wars in Iran and Ukraine and trade disruptions. He noted that strategic oil reserves are being depleted and that Middle East escalation, damage to Gulf refining capacity and the closure of the Strait of Hormuz mean no relief is in sight for oil prices. Canadian inflation has held at 3% for two months, and Macklem expects the outlook to be “quite a bit higher” than the July forecast, which had seen it cooling to about 2.5% in the second half of the year. The bank will release new forecasts with its Oct. 28 rate decision and could raise rates if price pressures spread, while Macklem expressed confidence in Canada, citing a stable dollar and early signs of investment recovery.
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