Bank of Canada Survey Raises Rate Forecasts
Market participants lifted their policy rate and bond yield projections in the third-quarter survey conducted in late September and early October.
Updated on Nov. 10, 2026 in Economic Indicators
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The median five-year Government of Canada bond yield rose 35 basis points quarter-over-quarter to 3.50%, according to the Bank of Canada Market Participants Survey. The Bank of Canada then raised its policy rate to 2.50% on October 28, after the survey window closed.
Why it matters
The survey's upward revisions suggest financial market professionals expect borrowing costs in Canada to stay higher for longer than previously anticipated. With 52% of respondents viewing risks to rate forecasts as skewed toward a higher path, the outlook for Canadian interest rates has shifted meaningfully.
The survey, a third-quarter poll of approximately 25 financial market professionals, shows the median 2026 year-end CPI forecast rising to 3.0% from 2.6%, and a 2027 five-year bond yield forecast of 3.45%. Projections of 1.6% GDP growth for 2026 and 1.8% for 2027 remain unresolved against the inflation outlook.
The players
Bank of Canada
Canada's central bank, responsible for setting the country's policy interest rate and managing inflation through monetary policy.
TD Economics
The economic research arm of TD Bank Group, based in Toronto, which publishes forecasts on Canadian interest rates and economic growth.
The details
Conducted between September 23 and October 1, the survey found the median December policy rate forecast rose to 2.50% from 2.25%. The Bank of Canada matched that projection by raising its rate on October 28, leaving respondents' expectations for a consensus terminal rate of 2.75% from March 2027 through end-2028 as the key point to watch.
Timeline
September 23 to October 1: Market Participants Survey conducted among financial professionals.
October 28: Bank of Canada raised its policy rate to 2.50%.
Q1-2027: A further 25-basis-point rate increase is possibly projected.
March 2027 through end-2028: Consensus terminal rate expected at 2.75%.
Economic Indicators
The upward revisions extend the trajectory captured in the Bank of Canada Market Participants Survey, where the share of respondents seeing upside rate risk rose from 40% in Q2 2026 to 52% in the third quarter. The survey's record of shifting expectations adds context to the central bank's October 28 move.
Households with variable-rate mortgages or planned borrowing could face higher payments if the policy rate continues rising. Expectations of a 2.75% terminal rate suggest borrowing costs may remain elevated through 2028.
The takeaway
Monitor the policy rate and bond yields when planning major borrowing, since market professionals now expect rates to climb further before settling near 2.75%.
Further reading
For broader context, explore Economic Indicators coverage for Canada.
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