Surprise! Or not - BoC Hikes Benchmark Rate Another 50 BP

As expected, the Bank of Canada (BoC) increased its benchmark rate another 50 basis points to 1.5%. The announcement of the rate hike was accompanied by a very hawkish statement, affirming that the Bank's position is “interest rates will need to rise further.” The Bank has already identified its "neutral" interest rate - one which applies neither the brakes or the gas to the economy - as between 2% and 3%, so they clearly feel they have room for further increases, especially in light of the current high inflation. This is further borne out by their statement "the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target." Clearly, there are more rate hikes to come. The Bank's announcement is here.