Canadian Rate Cut Odds Plummet as Strong GDP Data Surprises Markets

Stronger-than-expected Canadian GDP data has reduced the likelihood of a near-term Bank of Canada interest rate cut, according to TD Securities.

The latest gross domestic product figures showed the Canadian economy expanding at a pace that exceeded market forecasts. This resilience gives the Bank of Canada less reason to ease monetary policy in the near term as it balances growth against inflation concerns.

TD Securities analysts now see a reduced probability of a rate cut, shifting expectations toward a hold stance.

This means borrowing costs may remain elevated for longer, affecting mortgage renewals and variable-rate loans. Conversely, a resilient economy suggests the central bank can afford to keep rates restrictive to ensure inflation returns to its 2% target.