Bank of America: Despite the surge in oil prices, the threshold for the Bank of Canada to raise interest rates is expected to remain high.

Bank of America Securities believes that the current market expects the Bank of Canada to raise its policy interest rate by nearly half a percentage point this year, but this shift reflects oil-related risk premiums and tightening global financial conditions, rather than any changes in the fundamentals of the Canadian domestic economy. The bank stated that the threshold for a rate hike in 2026 is very high, and their baseline forecast assumes that despite rising oil prices, interest rates will remain unchanged. Bank of America indicated that the central bank will not take action unless it sees sustained and significant impacts that cause the inflation rate to rise to above 3% within several months, and/or if the Federal Reserve's rate hikes lead to a significant tightening of global financial conditions.