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Market data

Will the Bank of Canada raise or cut rates?

The Bank of Canada policy rate is 2.25% and the 2-year Government of Canada bond yield is 3.21% as of October 16, 2026. The 2-year yield is 96 basis points above the policy rate, which means bond traders are pricing an increase over the next two years.

Last updated October 16, 2026. Source: Bank of Canada Valet API. A market signal, not a forecast.

Policy rate today
2.25%
2-year bond yield
3.21%
Gap (2-year minus policy)
+96 bps
Next announcement
October 28

The bond market is pricing rate increases. The 2-year yield has moved -14 bps in the last 30 days and +35 bps in the last 90. The Bank of Canada decides on October 28, 2026.

How to read the signal

Bond traders move first. The policy rate follows.

Gap above +50 bps: the market expects the Bank to raise rates. The bigger the gap, the more increases are priced in.

Gap between -50 and +50 bps: the market expects the rate to stay roughly where it is.

Gap below -50 bps: the market expects cuts.

The 2-year yield is used because it covers the period the Bank is most likely to act in. The 50 bps threshold is a bips rule of thumb, not an official measure. Yields can reverse quickly on inflation, jobs or oil news, and the Bank can hold even when the market expects a move.

What decides the next move

Inflation: the Bank targets 2% and watches CPI and its core measures. See the latest inflation reading.

Jobs: a rising unemployment rate pushes the Bank toward cuts, a tight labour market toward holds or increases.

Bond yields: track the Government of Canada yield curve to see expectations shift between announcements.

Current rate and history: see the Bank of Canada rate page for every decision since 2022 and the full 2026 schedule.

Frequently asked questions

Is the Bank of Canada going to raise or cut interest rates?
The Bank of Canada policy rate is 2.25% and the 2-year Government of Canada bond yield is 3.21% as of October 16, 2026. The 2-year yield is 96 basis points above the policy rate, which means bond traders are pricing an increase over the next two years. This is a market signal, not a forecast from bips or from the Bank of Canada. The next announcement is October 28, 2026.
When is the next Bank of Canada rate announcement?
The next scheduled announcement is October 28, 2026 at 9:45 a.m. Eastern. The Bank announces eight times a year.
How can I tell where rates are headed?
The 2-year Government of Canada bond yield tracks where traders expect the policy rate to average over the next two years. When it sits well above the policy rate, the market expects increases. When it sits well below, it expects cuts. The Bank of Canada also publishes a Monetary Policy Report each quarter with its own inflation and growth outlook.
Will mortgage rates go up or down?
Variable rates follow prime, which moves within days of a Bank of Canada decision. Fixed rates follow bond yields of the same term and can move before any announcement. When bond yields move ahead of the policy rate, fixed rates often change first.
Has the Bank of Canada changed its rate recently?
The most recent change was a cut of 25 basis points to 2.25% on October 30, 2025.

Data: Bank of Canada Valet API (series V39079 and BD.CDN.2YR.DQ.YLD). This page describes what bond markets imply and is not financial advice or a prediction by the Bank of Canada.

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