Markets have Bank of Canada rate at 2.25% by the end of 2025: survey

The head office of the Bank of Canada located at 234 Wellington Street in Ottawa. Photo by Adam Huras/Brunswick News

The financial market believes the Bank of Canada will cut its policy rate to 2.25 per cent by the end of 2025 and then hold it there for all of 2026, according to a survey released by the central bank on Monday.

The quarterly survey of 30 financial market participants was conducted between June 25 and July 3, which was well before policymakers decided on July 30 to hold the overnight rate at 2.75 per cent for the third straight time.

Trade uncertainty, an economy that has proven to be more resilient than initially expected and evidence of underlying inflation were the three main reasons for the central bank holding. Measures of core inflation have hovered around three