OTTAWA—The Bank of Canada’s pause on raising interest rates lasted just over four months. Canada’s central bank raised its overnight rate target to 4.75 percent with a 0.25 percentage point (25 basis points) rate hike on June 7, in the face of mounting evidence of an economy that’s still running too hot.
The BoC cited a stronger-than-expected economy in the first quarter of 2023; however, it did not include in its June 7 statement language as it did on April 12 when it said it “remains prepared to raise the policy rate further.”
“Excess demand in the economy looks to be more persistent than anticipated,” the BoC said….