The Bank of Canada’s decision to hold its overnight rate steady at 2.25% through the first half of 2026, including the June 10 meeting, underpins the 57% market-implied probability of no rate hike this year. Persistent weakness in Canadian growth—marked by soft Q1 GDP and excess supply—combined with a labor market showing limited wage pressures, has outweighed the temporary inflation bump to 2.8% in April driven by Middle East energy prices. Core measures have eased toward 2.1%, supporting the BoC’s stance of looking through the shock while remaining data-dependent. Trader consensus reflects economist polls favoring an extended hold, with limited pass-through to broader prices and ongoing US trade uncertainty reinforcing caution. Key near-term catalysts include the July 15 announcement, subsequent CPI releases, and any escalation in energy costs that could shift the inflation trajectory.