The Bank of Canada says it's trying to not raise interest rates more than it has to, as members of the governing council are mindful of the risks associated with raising rates too much.
The central bank released its summary of deliberations today, providing insight into its decision to raise interest rates again earlier this month as the economy runs hotter than expected.
The central bank hiked its key interest rate by a quarter of a percentage point, bringing it to five per cent, the highest it's been since 2001.
The summary says the governing council considered whether rate hikes are just taking longer to affect the economy, or whether interest rates have not risen enough to slow the economy and bring inflation down.
Ultimately, they decided that both factors were partly at play, but that the cost of waiting too long to raise rates outweighed the benefits.
The document reiterates that the Bank of Canada plans to take future rate decisions one at a time, basing them on incoming economic data.
This report by The Canadian Press was first published July 26, 2023.
The Canadian Press
