By front-loading interest rate increases now, we’re trying to avoid the need for even higher interest rates down the road and a more pronounced slowing of the economy. Given the outlook for inflation, we continue to judge that the policy interest rate will need to rise further.
As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. 1 T. Chernis and C. Luu, “Disaggregating Household Sensitivity to Monetary Policy by  Expenditure Category,” Bank of Canada Staff Analytical Note No. 2018-32 (October 2018).