Bank of Canada Hikes Rate

The Bank of Canada raised its key interest rate.

As expected, BOC raised the target rate on overnight loans between commercial banks to 0.5 percent from 0.25 percent.

“Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments,” BOC said in a statement today.

The bank said Canada’s recent growth and inflation have been “largely as expected” while the global recovery is “increasingly uneven.” Canada’s output grew at a 6.1 percent annualized pace, twice that of the U.S. in the first quarter, while the central bank predicts inflation will exceed its 2 percent target over the next year.