The Bank of Canada has held its benchmark interest rate again, and while it didn’t rule out future hikes, experts believe rates may have peaked.

On Wednesday, the Bank of Canada held key interest rates five per cent for the second consecutive time, after recent data showed signs of an economic slowdown.

The hold was in line with most economists’ expectations, but central bank remained hawkish in its bias, meaning it left the door open to more rate hikes in the future.

“Overall, a range of indicators suggest that supply and demand in the economy are now approaching balance,” the bank wrote in its decision.

“Governing council is concerned that progress towards price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed.”

Earl Davis, head of fixed income and money markets at BMO Global Asset Management, said he believes the hawkish rhetoric is meant to keep spending on the downward trend, even as inflation slowly normalizes.

“We believe it’s now their base case that they will not hike, but they want to remain hawkish so the market doesn’t rally,” he told BNN Bloomberg in a television interview. “When they paused in January, they removed their hawkish bias and that’s when we got a lot more purchasing of houses, as well as other things and they want to prevent that.”

Last month’s summary of deliberations would lend credence to that thinking, as the Bank of Canada specifically indicated the threat of further hikes were meant to push back against expectations of cuts on the horizon.

Tu Nguyen, economist with RSM Canada, said Canadians may have seen the end of rate hikes for the time being.

“Despite the hawkish tone, the Bank of Canada are unlikely to deliver another rate hike given the downgraded economic growth and moderating core inflation measures,” she said in a written statement.

Marie-France Benoit, principal and director of market intelligence for Canada at Avison Young, also said she believes the rate hiking cycle is over.

“We are predicting high interest rates will keep GDP growth in negative territory until spring 2024, and this will create short-term headwinds for the real estate market,” she said in a written statement.

“On a more positive note, we also believe that five per cent marks the peak for interest rates.”

James Orlando, senior economist with TD Bank, said he expects the Bank of Canada will keep its hawkish rhetoric to keep spending down.

“It needs to maintain current tight financial conditions in order to achieve its forecasted slowdown,” he said in an email. “While markets are hesitant to build in another hike, the impact of the (Bank of Canada’s) rhetoric has resulted in a higher for longer path for the (Bank of Canada’s) policy rate.”