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Investors anticipate as many as three more hikes by the end of 2018 with the first in March, swaps trading suggests.

Rates will need to rise to account for an economy that has been one of the strongest in the developed world with a jobs market on a tear. Even with an anticipated second-half slowdown, Canada is headed for 3 per cent growth for all of 2017. That’s almost a percentage point above U.S. growth and has prompted some to question whether historically low interest rates — currently at below the rate of inflation — are appropriate for an economy at near its full capacity.

“We continue to think the central bank will be forced by strong data to deliver more interest rate hikes than what markets are currently expecting for 2018,” National Bank of Canada economists Stefan Marion and Krishen Rangasamy said in a note to investors Monday.

‘Complex Trade-Offs’

But there is also a case to be made for caution, and central bank policy makers have spent much of the past two months making it.

“Whether it’s about how aggressive or how cautious policy should be — getting the dosage right demands sound judgment about complex trade-offs,” Bank of Canada Senior Deputy Governor Carolyn Wilkins said in a Nov. 15 speech, the last by a central bank governing council member before the decision.

One argument against rate increases is weak inflation, which has undershot the central bank’s 2 per cent target for years. If the economy can continue expanding at a fast clip without overheating, policy makers can afford to wait longer before raising interest rates.