(Bloomberg) -- The Bank of Canada probably isn’t done raising interest rates. 

Whether they move now or in July, policymakers led by Governor Tiff Macklem are expected to resume their tightening campaign. About one in five economists surveyed by Bloomberg say the central bank will raise its benchmark overnight rate 25 basis points to 4.75% on Wednesday, when it delivers a statement-only decision at 10 a.m. in Ottawa. 

Others predict it will wait until next month. In the swaps market, traders have now fully priced a higher policy rate by July 12.   

Officials have been warning they may still need to crank borrowing costs higher since declaring a conditional pause in January. Now it’s clearly warranted, according to some economists. While heavily indebted Canadians have been pinched by the bank’s battle against inflation — interest rates shot up 425 basis points in less than a year — the overall economy remains surprisingly resilient. 

That wasn’t supposed to happen. At the end of last year, most economists said the country would likely be in the middle of a technical recession by now. 

Policymakers could keep watching the data and wait for monetary policy to work its way through the economy. But there’s more than enough evidence that rates just aren’t restrictive enough to bring inflation back to the 2% target within a reasonable time frame. 

“The right move here is for them to hike rates,” Andrew Kelvin, chief Canada strategist at Toronto-Dominion Bank’s securities unit, said by email. “The longer they wait, the greater the risk that they fall behind the curve again.”

Central banks around the world are facing similar challenges. On Tuesday, the Reserve Bank of Australia unexpectedly raised its key interest rate, a move that was expected by only a third of economists.

In January, the Bank of Canada became the first central bank in the Group of Seven to declare a pause — saying it would stop to assess how its aggressive hikes to date would work. Macklem said the move was conditional on the economy and inflation evolving in line with the bank’s forecasts. 

“The conditions to pause, which were laid out earlier this year, have now been violated,” Canadian Imperial Bank of Commerce fixed-income strategists Ian Pollick and Sarah Ying said in a report to investors. They’re forecasting a move in July. 

During the US regional bank crisis in March, it looked as though Macklem and his officials had got it right in hitting pause — they had brought Canada to an adequate terminal point without a hard landing for the economy, and inflation was decelerating. The financial turmoil led many to expect that the Federal Reserve wouldn’t hike much further, reducing concerns about rate divergence and imported inflation.

But as more data was released, concerns mounted that the pause was premature. 

Gross domestic product — including household consumption — grew by more than expected in the first three months of the year, with momentum continuing into the second quarter. Canada’s labor market is steadily cranking out more jobs than expected and the unemployment rate remains near record lows. The housing market is showing modest signs of recovery, with prices and sales rising in most major cities. 

Most importantly, progress on inflation hit a snag in April, as the headline annual rate and a key three-month moving measure of underlying core readings reversed course. 

For some analysts, the longer inflation stays above target, the greater the risk that Canadians’ price expectations become unanchored from the bank’s target — a situation that could require even higher rates to resolve.

It’s difficult to pinpoint a single cause for Canada’s surprising economic strength. Record immigration is one factor. Economists are also increasingly worried the fiscal spending of Prime Minister Justin Trudeau’s government is adding demand to an already overheated economy. 

By most measures, Canadians are also still sitting on a pile of pandemic-era savings — and many families became wealthier as housing prices exploded during the Covid crisis, fueled by rates being held at an emergency low near zero.

“It’s all about the housing market,” Stephen Brown of Capital Economics said Monday on BNN Bloomberg Television. “If it wasn’t for housing, you could still make the case that the lagged impact of higher interest rates is still feeding through.”

To his eye, the property market hasn’t just stabilized but is “on a complete tear again” — and that’s “really something the Bank of Canada needs to nip in the bud.”

--With assistance from Laura Dhillon Kane.

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