The Bank of Canada raised interest rates by 25 basis points on Wednesday, as expected. The central bank’s target for the overnight rate is now 2.25%.
In a statement, the Bank of Canada said that it is “committed to using its monetary policy tools to achieve its inflation target of 2%.” The bank also warned that inflation is expected to “moderate in the coming months,” but that it will “remain elevated for some time.”
The Bank of Canada’s decision to raise rates was in line with expectations from market participants. However, the bank’s warning about the persistence of inflation was seen as a hawkish signal. This could lead to further rate hikes from the Bank of Canada in the coming months.