CIBC Research discusses its reaction to today's BoC policy decision.

"After being overtaken by the Fed in June, the Bank of Canada reclaimed its top gun status, with the highest policy rate among G7 countries and the biggest step in this tightening cycle, as it seeks to calm inflation fears. Exceeding most expectations, the overnight rate was raised by 100 basis points to 2.5% in what is the biggest increase by the Bank of Canada since 1998 and the highest level since 2008. The policy rate now sits in the middle of the estimated neutral rate range of 2-3%. In addition, the Bank will continue with quantitative tightening," CIBC notes. 

"Overall, markets had a relatively muted reaction despite the surprise, which suggests that participants buy the qualification of "front-loading" rather than view that the larger hike suggest a much higher finish line," CIBC adds.