Bank on hold, may push back QT end date

The business surveys point to rising recession risks and core inflation pressures were muted in September, suggesting that there is little chance of the Bank of Canada raising interest rates next week. Nonetheless, the Bank’s communications could still seem hawkish if it highlights its recent analysis on the appropriate level of settlement balances, which implies that quantitative tightening (QT) could continue until the end of 2025 or even early 2026.