Bank of America: Despite soaring oil prices, Bank of Canada’s rate hike threshold is expected to remain high

Golden Ten Data reported on April 6 that BofA Securities believes that the market currently expects the Bank of Canada to raise its policy rate by nearly half a percentage point this year. However, this shift reflects oil-related risk premiums and a tightening of global financial conditions, rather than any changes in Canada's domestic macroeconomic fundamentals. The bank stated that the threshold for a rate hike in 2026 is very high, and its baseline forecast assumes that rates will remain unchanged despite rising oil prices. BofA said the Bank of Canada will not take action unless there is a sustained and significant shock causing inflation to rise above 3% for several months and/or a rate hike by the Federal Reserve leading to a significant tightening of global financial conditions.