Manulife turns hawkish on Bank of Canada with two hike call
“And secondly, you’re probably going to end up having to raise them more than if you moved earlier because things will have gotten more out of hand.”
Canada’s limited appetite for further trade escalation with the United States strengthens that case, Lapointe argued, calling the low likelihood of additional tariff moves “likely to be reassuring” to the Governing Council.
With GDP rebounding sharply in the second quarter and tariff-related damage largely contained to specific sectors rather than the broader economy, the rationale for further restraint has eroded.
“Because monetary policy cannot target specific industries,” he wrote, “the Governing Council is likely to conclude that trade tensions do not offset inflation risks in the near term and that slightly higher rates are required.”
Derek Burleton of TD Bank Group shared his outlook at MortgageFest Canada, arguing that Canada is in a different position than the U.S. and may not need the rate increases currently expected by bond markets.https://t.co/ru2zU1Vn9t
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 24, 2026
A divided outlook for brokers
Manulife’s call aligns with, though goes further than, the hawkish wing of Bay Street. Both Scotiabank and National Bank now project the overnight rate reaching 2.75% before December, making them the most aggressive among Canada’s major financial institutions.
