The outlook for interest rates is becoming less clear-cut as Canada’s major banks rethink how far the Bank of Canada will go in its rate-cutting cycle. While most still see room for further easing, RBC is breaking away from the pack.

The bank has taken additional cuts off the table, forecasting the overnight rate will hold steady at 2.75% through 2026—making it the most hawkish forecast among the Big Six.

In its latest Monthly Forecast Update, RBC said: “We no longer expect any rate cuts from the BoC this year.” The bank explained that “as direct trade uncertainty facing Canada recedes…the inflation outlook remains uncertain,” reducing pressure on the central bank to act further.

That’s a shift from earlier this year, when RBC still expected one more cut before the cycle ended.

By contrast, Scotiabank has revised its forecast lower, now projecting the policy rate to settle at 2.25%—down from 2.50% in its previous estimate. BMO, meanwhile, remains the most dovish, continuing to project a fall to 2.00% by early 2026.

TD, CIBC and National Bank continue to expect a terminal rate of 2.25%, in line with the Bank of Canada’s current inflation outlook.