The Bank of Canada raises rates, becoming the first large bank to do so.

The Bank of Canada became the first significant central bank fighting global inflation to declare it would probably delay future rises for the time being on Wednesday, when it hiked its benchmark interest rate to 4.5 percent, the highest level in 15 years.

The hike of 25 basis points was in line with forecasts made by analysts. In order to control inflation, which peaked at 8.1 percent and fell to 6.3 percent in December, still exceeding the bank's 2 percent target, it has raised rates at a record pace of 425 basis points in 10 months.

According to Andrew Kelvin, chief Canada strategist at TD Securities, the members of the Governing Council "obviously have enough confidence that the tightening presently in place is already slowing the economy that they are satisfied they won't need to increase rates further in most scenarios."

The bank stated in its quarterly Monetary Policy Report (MPR), which contains fresh predictions, that growth this year will be stronger than had been anticipated in October but is anticipated to plateau through the first half. Roughly the middle of this year, inflation will drop to around 3 percent, and it will meet its objective next year.

Tiff Macklem, governor of the Bank of Canada, told reporters that "inflation is turning the corner." We are still far from our goal, but recent events have strengthened our belief that inflation is decreasing.

The bank stated in a statement announcing the rate increase that it "expects to retain the policy rate at its current level as it examines the impact of the cumulative interest rate increases" if the economy develops as predicted.

The statement stated that the "Governing Council is willing to hike the policy rate further if necessary to return inflation to the 2 percent target."

A blown-out December employment report, released earlier this month, emphasized the upside risk to wage and price increases. The central bank had stated in December that future rate decisions would be data-dependent.

Director and head of macro strategy at Desjardins, Royce Mendes, stated that "The Bank of Canada is back to using forward guidance." That essentially guarantees a halt to the cycle of rate increases for at least the upcoming several months.

The bank stated in its MPR that "three-month CPI inflation has declined to roughly 3.5 percent, signaling a considerable slowdown in inflation in coming months," despite the fact that rising food and housing costs are still burdening people and headline inflation is still high.