J.P.Morgan and Goldman Sachs now expect the Bank of Canada to keep policy rates unchanged at 5% for the second straight month, as data on Tuesday showed the country’s inflation rate eased in September.
Both brokerages had earlier expected one last 25-basis-point interest rate hike on Oct. 25.
While J.P.Morgan said it expected the terminal rate to reamain at 5%, economists at Goldman highlighted the “risk of an incremental hike at future meetings.”
The Bank of Canada has hiked rates 10 times since early 2022 to fight inflation.
Canada’s annual inflation rate unexpectedly slowed to 3.8% last month and underlying core measures also eased, prompting markets and analysts to trim bets for another rate hike next week.