Bank of Canada Prepares for Rate Hikes Amid Rising Oil Prices

The Bank of Canada kept its key policy rate at 2.25% on Wednesday, as expected by economists.

However, Governor Tiff Macklem warned that policymakers are prepared to raise borrowing costs multiple times if inflation remains above the target rate of 2%

Macklem attributed the current high inflation rate of 3% to higher oil prices caused by the Iran conflict and noted that the upside risks to inflation have increased.

The bank's decision was seen as a hawkish message, with some economists predicting that interest rates may need to rise sooner than expected in response to rising oil prices.