Nanos survey finds 44% of Canadians expect the policy rate to stay at 2.25% over the next year.
Markets have flipped from debating the next cut to betting on the next hike – and they’re doing it in less than 48 hours.
According to Bloomberg, traders in overnight swaps now fully price in a Bank of Canada rate increase by October 2026, a sharp shift from the previous day when markets still assigned some likelihood to another cut over the next year.
The move followed a stronger‑than‑expected labour print that suggested the economy may not need more easing despite ongoing US tariffs.
Bloomberg reported that Canada’s unemployment rate dropped 0.4 percentage points in November, with job gains beating expectations.
Bonds sold off across the curve, and the yield on five‑year benchmark Government of Canada debt climbed about 20 basis points intraday.
Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, said the latest data “do appear to confirm that the economy is recovering following the trade-induced weakness earlier in the year” and added that he continues to expect the Bank of Canada’s “rate cutting cycle has ended.”
The central bank has been signalling a similar stance.
Policymakers cut the key interest rate by a quarter point in October to 2.25 percent and said it was at “about the right level” as long as growth and inflation unfold as expected.
Officials have also warned that structural damage from the ongoing trade dispute with the US, and the inflationary risk from tariffs, limit how much they can support the economy if prices push higher.
At the same time, Bloomberg noted that the Bank of Canada has kept the door open to respond if the outlook for growth and inflation deteriorates.
Despite the market’s hawkish turn, Canadians themselves appear more divided.
A national survey by Nanos Research for Bloomberg News found that 44 percent of respondents expect the Bank of Canada to keep its policy rate at 2.25 percent over the next year, while 31 percent anticipate at least one more cut.
About 9 percent foresee a hike and roughly 17 percent are unsure, according to the poll.
Expectations vary by region and demographic.
Nanos reported that the share expecting rates to hold at 2.25 percent ranges from 36.6 percent in the Prairies to 48.0 percent in Quebec, with Atlantic Canada at 41.9 percent, Ontario at 43.9 percent and British Columbia at 47.2 percent.
On the prospect of lower rates, Nanos found that 38.7 percent of men and 23.0 percent of women expect further cuts. Among younger Canadians aged 18 to 34, 40.2 percent see another reduction, compared with 29.6 percent in the 35‑54 group and 25.3 percent among those 55 and above.
The survey also hints at how expectations could feed back into the real economy.
Bloomberg reported that households who believe more easing is coming may delay major purchases until borrowing costs fall, which could restrain consumption even as markets shift toward a potential hike.
Nanos conducted the survey of 1,009 Canadians aged 18 and older between November 29 and December 2.
The Bank of Canada’s next interest rate decision is scheduled for December 10, and Bloomberg reported that both markets and economists it surveyed expect the central bank to hold rates steady at that meeting.
