The Bank of Canada delivered its biggest interest rate increase in 22 years on Wednesday, lifting its benchmark policy rate by half a percentage point to 1.0 per cent.

The central bank also plans to start unwinding its balance sheet as of April 25.

Here’s what Bay Street is saying about the decision:

“The Bank of Canada brought out the big guns in its fight against inflation, but for those fearing the worst, it’s noteworthy that it still sees room for the economy to put in two reasonably healthy years for growth as it does that.”

- Avery Shenfeld, chief economist, CIBC Economics

“We still expect the peak in Canadian rates to be markedly lower than in the U.S. — since housing is more obviously over-valued north of the border, household debt burdens are much higher and rate-sensitive residential investment accounts for a much bigger share of the economy.”

- Paul Ashworth, chief North America economist, Capital Economics

“They did a good job of just highlighting almost the unprecedented amount of uncertainty around these forecasts. ... I think the bank is in as precarious a spot as I've seen a bank in a long time.”

- Ed Devlin, founder, Devlin Capital; senior fellow, C.D. Howe Institute

“The Bank of Canada felt the need for speed in raising rates to more neutral levels. … We see scope for some further tightening in 2023, but still disagree with the market’s pricing that the Bank of Canada will match the Fed in taking rates above three per cent. Remember that consumption and housing began to turn over at a policy rate of 1.75 per cent in the last cycle. The ‘shock and awe’ of combining a 50 [basis point] hike with the announcement of quantitative tightening was at least partly to keep inflation expectations from becoming unmoored, which central bankers flagged again as a risk.”

- Royce Mendes, managing director and head of macro strategy, Desjardins

“Bam! The Bank of Canada stepped up with a widely expected acceleration in its tightening cycle. With inflation pushing towards six per cent, the labour market at full employment, and output pushing on capacity constraints, the bank needed aggressive action. By raising the policy rate by 50 basis points for the first time in 22 years, the Bank of Canada is setting the pace for more aggressive moves in the coming months.”

- James Orlando, senior economist, TD Economics

"I smile, because I consider that a central bank best-case scenario, not a market participant’s. We do forecast inflation coming lower; but to get to two per cent means that rates have to go a lot higher than the market is anticipating now."

-  Earl Davis, managing director, head of fixed income and money market, BMO Asset Management

“The group you think most about (for racing to buy a home) is anyone with a pre-approval from a few months ago at a rate that they can no longer get. They are rushing to try to find an appropriate home so they can finance it at that rate that they secured a couple of months ago.”

- James Laird, co-founder, RateHub.ca