Bank of Canada traders are pricing a 63% implied probability of at least one policy rate hike in 2026, driven primarily by March CPI inflation accelerating to 2.4% year-over-year—up from 1.8% in February—with a 0.9% monthly surge, the highest in 14 months, fueled by gasoline costs amid the Iran war. The central bank's April 29 decision to hold the overnight target at 2.25% for the fourth straight meeting came with a hawkish Monetary Policy Report forecasting CPI nearing 3% in April, tempered 2026 GDP growth at 1.2% amid US tariffs, and steady unemployment at 6.7%. Elevated oil prices and resilient labor markets underpin the consensus for potential tightening later this year, ahead of the June 4 decision.