While bond markets are pricing in four or more Bank of Canada rate hikes, TD Bank’s deputy chief economist Derek Burleton is calling it wrong. Speaking at MortgageFest Canada on September 23, 2026, Burleton laid out a starkly different scenario: no rate hikes in his baseline forecast, with only a 50% probability of even one occurring. This contrarian view comes as US Federal Reserve rate increases are pushing Canadian yields higher, with five-year yields climbing 80-85 basis points since February lows. Burleton argues Canada’s economic fundamentals differ significantly from the US—core inflation is near the 2% target, and labour market slack remains. For GTA borrowers and brokers, the implications are significant: fixed mortgage rates will likely stay elevated longer than expected, but the feared aggressive tightening cycle may not materialize. Ontario home prices have already fallen over 20% in a four-year correction, and Burleton sees green shoots of recovery emerging. TD forecasts moderate mortgage volume growth of 4-5% nationally. The takeaway? Current yields won’t retreat to 2025 levels, but don’t expect the dramatic rate hike scenario markets are pricing in.
Source: Read the original article
