The Bank of Canada’s decision to hold its overnight target rate steady at 2.25% through July 2026, with sub-trend GDP growth now projected at just 0.7% for the year and inflation easing toward the 2% target by early 2027, underpins trader consensus favoring no rate hike in 2026. Persistent weakness in domestic demand, an unemployment rate near 6.5%, and limited pass-through from elevated energy prices have kept core measures close to target. Forward curves and major bank forecasts price only modest odds of a single 25-basis-point tightening by year-end. Geopolitical uncertainties and U.S. trade risks further tilt the balance toward a wait-and-see stance, with near-term catalysts including the September and October announcements plus incoming CPI and labor data.