Bank of Canada Boosts Bank Rate

In a move that caught several pundits off guard, the Bank of Canada (BoC) raised its benchmark rate by 25 basis points to 4.75%. What was surprising was the timing - many felt that, while an increase was in the cards, it wouldn't happen until the July meeting of the BoC's Board of Governors. The Bank cited "stubbornly high" underlying inflation, continued strength in the economy, strong consumer demand for goods and services, an increase in housing market activity, and continued tight labour markets in its decision. In addition, the tone of the announcement has moved from neutral to slightly hawkish, indicating that more interest rate increases may be in the offing. You can read the announcement here.