Canada Economics Comment: July BoC Preview: In a Good Place

Research evidence excerpt

Canada Economics Comment: July BoC Preview: In a Good Place

Economics Research

13 July 2026 | 12:18AM BST

n Since the BoC last met in June, activity data have shown signs of improvement Megan Peters

+44(20)7051-2058 |

while inflation pressures have remained contained. Lower oil prices following the megan.l.peters@gs.com

Goldman Sachs International

tentative US-Iran deal to reopen the Strait of Hormuz have further reduced

Joseph Briggs

upside inflation risks. +1(212)902-2163 | joseph.briggs@gs.com

Goldman Sachs & Co. LLC

n With both upside inflation risks and downside growth risks diminishing, we

expect the BoC to remain firmly on hold this week. We look for a return to

pre-war guidance that the policy rate is in “about the right place” but continued

emphasis on the need to remain “nimble” amid still-elevated uncertainty. We

expect modest downgrades to the growth and headline inflation forecasts in the

MPR after incorporating lower oil futures prices, but we expect the broader

economic outlook will be little changed.

n We expect that the BoC will remain on hold in 2026 before normalizing to the

middle of its neutral rate range next year. Our forecasts remain dovish relative to

market pricing.

July BoC Preview: In a Good Place

At its June meeting, the BoC held the policy rate at 2.25%, judging that this setting

appropriately balanced downside risks to growth from potential US trade policy

changes against upside inflation risks from the war in Iran. Since then, oil prices have

fallen on the back of the US-Iran peace deal, and incoming activity data have shown

signs of improvement. We expect these developments to broadly offset one another,

leaving the policy outlook unchanged and keeping the BoC on hold at this week’s

meeting (decision at 9:45am ET on Wednesday, July 15).