10/19/2026
Ok folks. Lots of chatter and concern about where the Bank of Canada is going (or not) with rates. Here’s my 2 bits, for what it’s worth:
Coles notes version -
The Iran war has caused a big jump in oil/gas/diesel prices at the pumps. This has resulted in a higher cost to ship truckloads of product, per unit loaded onto them from the Ports to the grocery aisles. That’s “inflation”. That has gone up.
Normally, that number is a reflection of people having more money in their jeans & wanting to spend it, so biz raises their product prices to capture some of that cash for themselves.
That’s not happening right now: People do NOT have more $$ burning holes in their jeans and have been spending a lot less than in previous years (I’m pretty sure you all would agree) and focusing on just buying staples (or changing what you spend your money on (switching from beef to chicken or beans for your proteins for example))). That’s “core” inflation numbers, which have been DECLINING.
So, if the BoC raises their rates, it will only make that worse and pretty much guarantee a deep recession, which nobody wants.
They’re stuck.
My thought is that they will hold steady to wait out what happens in the US Midterms (because that may end the Iran war, which should reduce the price of oil). If that happens, then the BoC may reduce their overnight lending rates to get more $$ into people’s pockets so that they can buy more staples, which would be a good thing.
Like I stated previously, it’s just my 2 bits. For what that’s worth. 😉😊
We’ll find out together.
