Bank of Canada Hikes to 2.5% as the Fed and ECB Hold: Three Rate Decisions in Two Days (October 2026)

The Bank of Canada raised its policy rate by a quarter point to 2.5% on Wednesday, October 28, 2026, citing inflation that is higher and more persistent than it expected in July. Hours later, the US Federal Reserve held its target range at 3.75%–4%, with two of twelve voters asking for a hike. On Thursday, the European Central Bank held its deposit rate at 2.5%.

Three central banks, one message: interest rates are not coming down soon. For our clients in Toronto, New York and Europe, that shapes both what their home-market property is worth and what it costs to buy in Sint Maarten.

What happened

Bank of Canada, October 28

• Overnight rate up 25 basis points to 2.5% (from 2.25%). Bank Rate 2.75%, deposit rate 2.45%.

• CPI inflation has run near 3% since April and is expected to reach about 3.5% by year-end, driven by energy prices as the Middle East conflict enters its eighth month.

• Excluding gasoline, inflation was 2.2% in September. The Bank projects CPI to average 3% in 2027 and return to 2% around mid-2028.

• Growth forecast: 1% in 2026, 2% in 2027. Unemployment around 6.5%.

• The Bank said there "could be a need to increase the policy rate further," but it will "proceed carefully." Next decision: December 9, 2026.

US Federal Reserve, October 28

• Federal funds target held at 3.75%–4%, the level set by the September 16 hike.

• Vote 10–2: governor Lisa Cook and Cleveland Fed president Beth Hammack preferred another quarter-point increase.

• The statement: "Inflation remains elevated," while economic activity is "expanding at a strong pace."

European Central Bank, October 29

• Deposit facility rate held at 2.50%; main refinancing rate 2.65%.

• The ECB said rising energy prices pose upside risks to inflation and downside risks to growth, and that it will decide meeting by meeting.

US mortgages, October 29

• Freddie Mac's 30-year fixed average eased to 7.24%, from 7.32% a week earlier and 6.17% a year ago. The 15-year averaged 6.60%.

Why it matters

For Canadian buyers. The Bank of Canada says the loonie is trading around 71 US cents. Sint Maarten prices are in US dollars, so a $600,000 condo in Simpson Bay costs roughly C$845,000 before closing costs. A rate hike can support the Canadian dollar at the margin, but the Bank itself kept its currency assumption unchanged. The more direct effect is at home: variable-rate mortgages and home equity lines in Canada get more expensive, and that weighs on the Toronto sale that often funds a Caribbean purchase.

For US buyers. The Fed paused, but two dissents for a hike tell you the bias. At 7.24%, the 30-year mortgage is down for a second week yet still more than a point above last year. Cash on deposit, on the other hand, keeps earning close to 4%, which raises the bar for any property purchase to justify itself.

For European buyers. The ECB holding at 2.5% leaves euro borrowing far cheaper than dollar borrowing. On the French side, where prices and notary costs are in euros, that matters for anyone financing in Europe.

Locally. The Central Bank of Curaçao and Sint Maarten raised its own rate to 4.50% on September 17. The Caribbean guilder (XCG) is pegged at 1.79 per US dollar, so local policy follows the dollar more than the euro or the loonie.

This is not financial advice; talk to your bank or adviser about your own rates and currency exposure.

Our read

Most of our buyers pay cash or use equity from a home in Canada, the US or Europe. For them, the rate story is less about a Sint Maarten mortgage and more about the value of what they are selling and the exchange rate on the day they wire funds. A Canadian waiting for a better loonie has been waiting a long time; at 71 cents, we see more Canadian clients deciding on the property first and hedging the currency second.

Higher-for-longer also keeps a lid on competition from leveraged buyers, which tends to favour cash buyers on well-priced condos in Maho, Cupecoy and Pelican Key. Sellers should price for that reality rather than for 2022.

If you want to run the numbers on a specific property, in US dollars, Canadian dollars or euros, talk to our team or browse what is for sale now.

Sources: [Bank of Canada](https://www.bankofcanada.ca/2026/10/fad-press-release-2026-10-28/), October 28, 2026; [Federal Reserve](https://www.federalreserve.gov/monetarypolicy/files/monetary20261028a1.pdf), October 28, 2026; [European Central Bank](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.mp261029~9a493adf17.en.html), October 29, 2026; Freddie Mac Primary Mortgage Market Survey, October 29, 2026; Central Bank of Curaçao and Sint Maarten, September 2026.