Bank of Canada Likely to Keep Rates Unchanged But Signal Further Hikes Possible

Bank of Canada expected to hold rates steady at 5% on Wednesday, but keep hawkish bias and leave door open for future hikes.

Growth is flatlining, unemployment rising, and inflation slowing, but core inflation still above target.

Bank wants to maintain flexibility for more hikes if needed, avoid constraining policy.

Forecasts likely to show very slow growth ahead, but bank's mandate is getting inflation to 2% target.

Higher long-term yields contributing to tighter conditions, but bank may need to hike more if inflation expectations become unanchored.