Bank of Canada hikes key interest rate to 4.75% - BNN Bloomberg

, the highest since 2001. The move was expected by only about one in five economists in a Bloomberg survey, and markets put the odds at about a coin flip.

“Monetary policy was not sufficiently restrictive to bring supply and demand into balance and return inflation sustainably to the 2% target,” the bank said, citing an “accumulation of evidence” that includes stronger-than-expected first quarter output growth, an uptick in inflation and a rebound in housing-market activity.

The statement was light on forward-looking commentary, suggesting policymakers aren't yet sure whether the move will end up as a fine tuning or the start of another series of increases. Officials said they plan to examine how excess demand, inflation expectations, wage growth and corporate pricing behavior evolve.

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