RBC Forecasts Flat Q4 Growth as Bank of Canada Maintains Policy Bias

RBC Economics reports that the Bank of Canada (BoC) is likely to maintain its current policy bias as Canadian GDP growth continues to soften. Economists at the bank have downgraded their Q4 growth expectations to a flat level, reflecting immediate economic headwinds. Despite the near-term stagnation, there is optimism that real per-capita GDP will begin to show improvement heading into 2026. The trade-exposed manufacturing sector remains a point of weakness, though broader spillovers to the rest of the economy appear limited. This holding bias suggests the BoC will remain cautious, potentially keeping interest rates steady until clearer growth signals emerge. Market participants are closely watching the impact on the Canadian Dollar (CAD) as the economic outlook remains mixed.