The Bank of Canada’s decision to hold its overnight rate steady at 2.25 percent on April 29, 2026, amid elevated energy prices from the Middle East conflict has created a narrow balance in trader expectations for a 2026 rate hike. Recent CPI readings near 3 percent, driven by gasoline costs, have prompted markets to assign a 54.5 percent implied probability to at least one 25-basis-point increase this year, even as the central bank’s base-case forecast shows inflation returning to its 2 percent target by early 2027 and economic growth remaining modest at 1.2 percent. Persistent U.S. tariff uncertainty and softer domestic demand continue to weigh against aggressive tightening, while resilient oil prices and any upside surprises in June 10 data releases could shift sentiment toward earlier policy normalization.