After raising interest rates twice this year, one investment strategist is warning the Bank of Canada should be cautious about taking a hawkish stance going forward.

Craig Fehr, Canadian Investment Strategist at Edward Jones, told BNN while the last two rate increases were justified because of strong economic growth, he doesn’t believe that growth is sustainable.  

“It will be a very delicate dance moving forward now,” he said in an interview Thursday. “When we think about the impact of rate hikes, specifically where the growth has come from – it’s come from consumers and housing in Canada. And rate hikes directly impact the growth and the outlook there.”

The Canadian economy accelerated far more than in expected in the second quarter, with GDP rising 4.5 per cent instead of the estimated 3.7 per cent. The Bank of Canada responded to the strong growth by raising its benchmark interest rate by 25 basis points to one per cent last week.

However, Fehr sees a weaker Canadian economy for the remainder of the year, and a lower loonie in the mid-to-high 70s range.                                                                                                                

“I think it’s going to be very tricky, and I would like to see the Bank of Canada take an extreme bit of caution from here to make sure that they see how these rate hikes filter into the economy before continuing to pursue this aggressive rate hike path,” he said.