The Bank of Canada is expected to keep its benchmark interest rate at 2.25% during its upcoming meeting, as many economists believe a rate hike is more likely than a cut in the near future. This decision comes as consumers face high living costs and the country experiences a technical recession. While the Royal Bank of Canada Economics anticipates that rates will remain stable throughout 2026, they predict gradual increases starting in 2027. The Parliamentary Budget Officer also projects that rates will rise, potentially reaching 2.50% by mid-2027. Despite the recession, positive signs are emerging, such as a decrease in the unemployment rate to 6.6% and an addition of 88,000 jobs in May. The Bank of Canada must balance its monetary policy to promote economic welfare while managing inflation, which remains a priority. The upcoming policy announcement is set for Wednesday at 9:45 a.m. eastern time, with a press conference to follow.