Desjardins Predicts Bank of Canada Rate Hike in Q1 2027

Desjardins has revised its forecast for the Bank of Canada's next interest rate hike, predicting it will occur in the first quarter of 2027. The financial institution cites stronger economic growth and a slight easing in trade uncertainty as reasons for the adjustment.

The forecast change is based on Desjardins' updated estimate of Canadian GDP growth, which it now expects to reach 2.8% annually in the second quarter. This figure exceeds both Desjardins' previous projection and the Bank of Canada's latest prediction.

Desjardins attributes this growth to higher federal income transfers and government spending, which are expected to support business investment in the third quarter. However, renewed U.S. tariff threats may impact the Canadian economy, albeit modestly.