The Bank of Canada’s decision to hold the overnight rate at 2.25% through July 2026, amid an improving but still slack economy and soft core inflation near 2%, underpins the 79% market-implied probability against a hike this year. July’s Monetary Policy Report projected GDP growth rising only to 0.7% for 2026 before accelerating to 1.8% in 2027–28, with headline CPI easing from recent 3% levels toward the 2% target by early 2027 as oil-price effects fade. Major banks and futures pricing anticipate the policy rate remaining unchanged through December 2026 meetings, citing excess capacity and the need for clearer evidence of sustained demand before any tightening. Key near-term catalysts include the September 2 announcement and October Monetary Policy Report, which will clarify whether stronger data or persistent energy pressures shift the rate path into 2027.