Bank of Canada increases overnight rate by 0.50%. Your variable rate mortgage and secured lines of credit will increase.  The tone of announcement is rates need to rise due to inflation.  ‘Quantitative tightening QT’ in effect this month, which means  government no longer replacing maturing bonds on the Bank’s balance sheet.

Core inflation now declared at average almost 6% in the first half of 2022 and to remain well above the control range throughout this year. “Return to the 2% target in 2024.” But then provides interesting warning: “There is an increasing risk that expectations of elevated inflation could become entrenched. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well-anchored.”

Mentions US Federal Reserve and use of their monetary tools, demonstrating how our two economies are linked.

Announcement ends again with reminder “Interest rates will need to rise further. The policy interest rate is the Bank’s primary monetary policy instrument, and quantitative tightening will complement increases in the policy rate.”

Next meeting June 1.