Financial markets have begun pricing in a Bank of Canada rate hike next week, giving more weight to Governor Tiff Macklem's hawkish remarks than to September inflation that came in better than expected. Statistics Canada reported annual inflation rose to 3.1% from 3%, driven by a 6.1% monthly jump in gasoline prices, while excluding energy it eased to 2.2%. Swap markets priced about an 80% chance of a quarter-point hike at the Oct. 28 decision, up from roughly 35% on Friday, and several Bay Street forecasters switched to calling for a hike, though it remains a minority view. Royce Mendes of Desjardins said central bankers can no longer look through the inflationary impact of high energy prices, while the BoC's two preferred core measures fell to 1.9% and 1.8%. Macklem said that if oil stays around US$100, inflation would gradually drift up from 3%, and the bank will weigh whether inflation returns to target on its own or whether rates must rise.
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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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- CP NewsAlert : Higher gas prices drove inflation up to 3 . 1 % in September : StatCan
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