Will the Bank of Canada Raise Interest Rates? Watch Diesel
Posted by Christopher Audette on
The central bank has held its policy rate at 2.25% since October 2025, but diesel at a record has changed the outlook. So, a new question arises. Will the Bank of Canada raise interest rates? Market odds of an October 28 hike moved from about 6% to roughly a coin flip, and Governor Tiff Macklem says oil is about $40 above what is appropriate, with risk if it stays near $100 a barrel. Here's what that means for your mortgage rate.
Fuel Is the Inflation Wild Card
Retail diesel hit $2.64 per litre, per Canadian Press. August CPI was 3.0%, but excluding gasoline it was 2.4%, with rent and food each up 2.8%. That gap is why a fuel shock matters to the Bank: it can push headline inflation up even when underlying prices are calmer. Analysts are…
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