Bank of Canada Risks Overdoing Tightening as Core Inflation Remains Near 2%, Rosenberg Research Says

09:56 AM EDT, 10/29/2026 (MT Newswires) -- The Bank of Canada's 25-basis-point rate hike to 2.50% on Wednesday risks overtightening monetary policy, given that core inflation remains close to or below the 2% target, according to Rosenberg Research in a note. The recent price pressures in Canada are largely driven by higher energy costs, wrote Rosenberg Research in the Thursday note. Canada's central bank lifted its inflation outlook for this year and 2027 and signaled scope for additional rate increases, while underscoring the need for caution amid persistent uncertainty, said Rosenberg. Raising rates to counter a global supply shock could place undue pressure on an already fragile economy, especially as employment weakens and excess capacity persists, it added. With underlying inflation pressures still subdued, the latest hike may prove precautionary, with the BoC likely to deliver at most one further increase despite market expectations for additional tightening, said Rosenberg.