Bank of Canada could opt for another rate hike but it will wait for further data

Deputy Governor Sharon Kozicki noted that they will be “data dependent” when it comes to further monetary policy decisions. At the same time, she didn’t take more significant rate hikes off the table. 

According to Kozicki’s remarks, bank officials are set to act decisively. She added that interest rates increased too quickly, and it affected the nation’s economy. 

The Bank of Canada hiked its key interest rate by another 50 basis points on Wednesday, hinting at easing up on interest rate rises. Most economists believed that the central bank would approve such a rate hike. However, few expected the bank to open the door to pausing its hiking cycle.

The Deputy Governor also dropped language that said they would adjust monetary policy. Bank officials are currently gauging the influence of a 4-percentage-point increase on the economy.

She said that focus was no longer on the size of interest-rate hikes, but on the need for policy adjustments.

Officials are seeing slowing demand in some sectors that are more sensitive to changes in interest rates, although overall there is still excess demand.