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The Bank of Canada, as expected, raised its trend setting interest rate 0.25 per cent to 1.5 per cent.

"Governor Poloz did note the risk of a far greater shock to the economy should we see more tariffs (autos in particular) but suggested that they "can't make policy based on hypotheticals".

Another decision on interest rates is expected in September. Talks to renegotiate the North American Free Trade Agreement stalled earlier this year, and Canada imposed retaliatory tariffs this month.

"At a quarter point it's not going to change a lot right now, but the Bank of Canada does anticipate to have to continue to raise rates in the future to keep inflation in check, so that's something to be mindful of", said Philip Herner, financial advisor with Assante Capital Management Ltd.

Aside from the US trade threat, there isn't much to keep the Bank of Canada on hold, added Brett House, deputy chief economist for Scotiabank Economics. According to ratehub.ca, a mortgage worth $400,000 amortized over 25 years with a 5-year variable rate of 2.50 per cent, will now cost $50 per month or $600 per year.

The Bank of Canada's quarterly update predicts the economy will show growth in 2019 and 2020, a better outlook than what was forecast in April.

TD senior economist Brian DePratto wrote in a note to clients Wednesday that the messaging is consistent with a central bank that's "committed to a rate hike cycle, but leaves sufficient room to adjust to evolving events".

"The Bank maintained a cautious tone while highlighting its data dependency, that said, this was not the "dovish" hike many, including ourselves, expected".

The country's inflation rate is expected to rise as high as 2.5 per cent - above the two per cent mid-point of the bank's target range - due to temporary factors such as higher gasoline prices.

The bank, however, noted in its report that despite "healthy" labour market conditions, employment growth and average hours worked have slowed down compared to last year's surge.