Bank of Canada Set to Strike Balanced Tone Next Week, Avoiding Policy Direction Amid US Tariff Trade War, Says Nomura

11:58 AM EDT, 08/27/2026 (MT Newswires) -- Governor Tiff Macklem is likely to strike a balanced tone at next Wednesday's Bank of Canada meeting, avoiding guidance on the policy move as renewed US-Canada trade tensions heighten risks to both growth and inflation, Nomura wrote in a note. The BoC is expected to hold its policy rate at 2.25%, with contained core inflation, a stabilizing labor market and improving growth allowing policymakers to remain patient, wrote the bank in a Wednesday note made available to the media on Thursday. However, sustained retaliatory tariffs could add 0.2 to 0.4 percentage point to headline inflation, while elevated energy and technology prices pose further supply-side risks, added Nomura. Rather than signaling a hike or cut, Governor Macklem is likely to outline conditions that could justify either move, as in June, according to the bank. Nomura said it expects the BoC to remain on hold through 2026, with the key focus on whether policymakers are becoming less willing to look through repeated supply shocks.