The Bank of Canada’s decision to hold its 2.25% policy rate for a seventh consecutive meeting on September 2 reflects the dominant driver behind the 70.5% market-implied probability of no rate hike through 2026. Persistent energy-driven headline inflation near 3% is offset by core measures anchored close to the 2% target and an economy operating below capacity, with Q2 GDP growth of 3.3% still leaving room for labor-market improvement amid elevated unemployment. New U.S. tariffs introduce downside growth risks that largely balance upside inflation pressures from the Middle East conflict, prompting the BoC to adopt a patient stance without signaling near-term tightening. Major bank forecasts and the Q2 Market Participants Survey project steady rates through year-end 2026, with the first 25-basis-point increase more likely in 2027. The October 28 meeting and upcoming inflation and labor data releases remain key near-term catalysts that could shift trader pricing if energy effects broaden or trade conditions deteriorate materially.