News Analysis
OTTAWA—The Canadian economy is in the midst of a rapidly rising interest-rate environment. The Bank of Canada is faced with trying to put out an inferno of inflation amid a red-hot economy while being criticized for the current predicament.
For the second straight meeting, on June 1, the BoC raised its policy interest rate by 50 basis points to 1.5 percent from 1 percent. A 50 basis points hike—a basis point is one one-hundredth of a percentage point—was widely anticipated.
“The Governing Council continues to judge that interest rates will need to rise further … is prepared to act more forcefully if needed to meet its commitment to achieve the 2 percent inflation target,” according to the BoC’s June 1 statement….