Blog | AI & Lending

Seven Holds and Rising Inflation Risk. The Rate-Cut Cycle Isn't Coming to Save 2027.

The decision

On September 3, 2026, the Bank of Canada held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. It was the seventh consecutive hold, extending a pause that started when the Bank cut to 2.25% in October 2025. Governor Tiff Macklem confirmed the July Monetary Policy Report call for a "broadening recovery" in the economy - but framed inflation as the risk moving fastest. "Oil prices are back up," Macklem told reporters in Ottawa. On tariffs, he was blunter: "The counter-tariffs, and indeed the US tariffs will add costs for some businesses. These tariffs are very steep, but they are applied to a relatively narrow base." The war in the Middle East, he added, is the "bigger issue" for inflation.

The Two-Minute Refi Is Coming to US Banks. The $9 Trillion MBS Market Isn't Ready.

The report

On August 27, 2026, Bloomberg published a piece arguing that AI will help homeowners whose loans are ripe for refinancing secure new, cheaper loans "far faster." The reporters cited Morgan Stanley research showing that when rates fall, only about one-third of homeowners who could save meaningfully by refinancing actually do so - largely because the process is "notoriously drawn-out and tedious." The stated implication: faster refis will squeeze investors in the $9 trillion US mortgage bond market.

Every Canadian Bank Beat Q3 2026 Estimates. So Why Is Personal Banking the Story?

The setup

The Big Six reported Q3 2026 results between August 25 and 27. All six beat. The numbers are eye-catching: record profits at RBC and TD, RBC's ROE at 17.9%, TD's wholesale banking net income up 87%, CIBC up 15%, Scotia up 17%, National up 23%. BMO's adjusted numbers cleared expectations despite a charge tied to the sale of its transportation and vendor finance business. Canadian bank stocks are now the most expensive on a forward-earnings basis since 2010.

The Quiet Turn: Canadian Business Lending Just Tightened, and Fraud Is Already a C$2.5B Problem

Two data points, one customer

Two Canadian financial data points landed within 24 hours of each other last week, and read side by side they say something the individual releases don't. On Thursday, the Bank of Canada published its Q2 2026 Senior Loan Officer Survey, and overall business lending conditions moved to a balance of -1.04 (tightening) from +0.96 in Q1. It is the first negative reading since Q4 2025. On Wednesday and Thursday, Capco published a fresh Canada Payments Fraud Survey and a companion analysis on first-party fraud, together putting a C$2.5B working estimate on Canadian FI economic exposure to first-party fraud alone.

The date the batch era ends on paper

On Monday, August 24, 2026, Canadian Payments Association By-law No. 10 and the RTR Rules come into force. It is one of those regulatory events that will feel administrative on the day and structural in retrospect. The by-law is the foundational legal framework for Canada's Real-Time Rail, the new 24/7/365 exchange, clearing and settlement system that supports instant, irrevocable, data-rich account-to-account payments.

AI & Lending