This decision by the central bank comes with a level of uncertainty. Previously, the market anticipated just over one full hike by the end of the year. However, the current scenario suggests that the July hike might barely meet expectations. The BoC faces the challenge of striking the right balance, as raising rates too slowly could fail to moderate demand, resulting in prices simply absorbing the higher costs as the market adjusts.

Canadian inflation has exhibited a mixed performance, with headline CPI growth falling short of expectations while short-term core metrics remain stubbornly high. While this has prompted cautious optimism, experts predict another rate hike by the Bank of Canada in July. The central bank aims to temper inflationary pressures and strike a delicate balance between stimulating economic growth and preventing excessive price increases.

As the coming weeks unfold and more data becomes available, the decision to raise interest rates will depend on various factors, including inflation trends, economic indicators, and market sentiment. It is crucial for policymakers to carefully assess the potential impact of rate hikes on the Canadian economy, keeping in mind the need to maintain stability and support sustainable growth in the long run.