November 2nd, 2026, 5:23PM
CIBC chief economist Avery Shenfeld says the Bank of Canada may be overstating how long energy costs will keep inflation elevated, as he forecasts a December pause followed by one more rate hike, probably in January.
Speaking on CIBC’s Eyes on the Economy podcast, Shenfeld said spare capacity in the economy should limit businesses’ ability to pass higher energy costs on to consumers.
“To me, that’s putting a little too much emphasis on cost push inflation,” he said.
CIBC has progressively brought forward its expected rate increases, now forecasting a policy rate of 2.75% in the first quarter of 2027, compared with 2.50% previously and 2.25% before that. The expected peak remains 2.75%.
Shenfeld said the BoC’s October decision left room to space out further increases rather than commit to back-to-back hikes.
A prolonged energy shock could require more increases, he said, while lower oil prices and worsening trade conditions could remove the need for another hike.
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Last modified: November 2, 2026