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Market Participants Forecast March 2027 Rate Hike, Trim 2026 GDP Growth Estimate, Bank of Canada Survey Says

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The Bank of Canada's second-quarter Market Participants Survey released Monday showed that financial markets expect a 25-basis-point rate hike, with the policy rate projected to rise to 2.5% in March 2027.

The survey, conducted between June 11 and 18 with 26 market participants, also reflected a weaker growth outlook.

The median forecast for 2026 gross domestic product growth was revised down to 1.3% from 1.6% in the first-quarter survey, while the 2027 growth forecast was unchanged at 1.9%.

Inflation expectations were broadly unchanged. Participants continued to expect CPI inflation to average 2.6% by the end of this year, 2.1% in 2027 and 2.0% over the five-year horizon, consistent with the previous survey.

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