Scotiabank calls for a quarter-point Bank of Canada hike next week

The bank's forecast runs against swap-market pricing that has leaned toward no change since this month's jobs report

Scotiabank expects the Bank of Canada to raise its benchmark interest rate by 25 basis points at next week's decision, scheduled for October 28 and accompanied by a new Monetary Policy Report and press conference.

The call puts Scotiabank at odds with pricing in the swap market, where the odds of an October hike had fallen to 27% from 40% after the October 9 jobs report. That shift followed signals from Governor Tiff Macklem that the central bank was focused more on growth risks from tariffs than on inflation.

The Bank of Canada has held its policy rate at 2.25% since October 2025, leaving it unchanged at six straight meetings, most recently in July, according to financecalendar.com. At its September meeting, it cited trade war risks to growth as the reason for holding steady, the Globe and Mail reported. More recently, Macklem said on October 17 that persistently high global crude and petroleum prices will push the bank's inflation forecast well above its July projection, which had seen inflation cooling to around 2.5% in the second half of this year, CP24 reported.

If Scotiabank's view spreads and traders rebuild bets on a hike, it would work against the recent support that longer-dated Treasury yields have drawn from expectations of a lower rate path in North America.