Persistent headline inflation near 3% year-over-year in August 2026, fueled by elevated gasoline prices amid Middle East tensions, alongside U.S. tariff uncertainties, has kept Bank of Canada rate-hike odds competitive with a hold at the current 2.25% policy rate. Core measures remain anchored near the 2% target, while labor market slack and subdued wage growth support arguments against tightening before year-end. Traders weigh these upside inflation risks against growth headwinds from trade frictions, producing closely matched implied probabilities for no change versus a 25 basis point increase at the December 9 decision. The October 28 Monetary Policy Report and associated rate announcement represent the key near-term catalyst likely to clarify the path.