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“The uncertainty related to NAFTA was a key road block in preventing a hike this week,” said Ian Pollick, head of rates strategy at Canadian Imperial Bank of Commerce. The pact “has effectively sealed the deal for the third interest rate hike of 2018.”

The increase would also put the Bank Canada more in sync with the Federal Reserve, which has raised rates three times this year as well — making the two central banks easily the most hawkish in the Group of Seven.

Still, borrowing costs remain low compared with historical levels. Indeed, the policy rate remains below the rate of inflation — an abnormal situation for an economy that is running up against capacity constraints.

Even so, Bank of Canada officials have taken pains to make clear they will proceed only gradually given major risks to the outlook, including lingering trade tensions and the impact of higher rates on indebted households. In practice, that has meant increases about once a quarter.

There is some speculation Poloz may choose to accelerate that schedule now that the trade deal is signed, though the market consensus is that it simply cements the existing path. Swaps trading suggests four more rate increases — including one on Wednesday — by the end of next year. That would bring the policy rate to 2.5 per cent, where the hiking cycle is expected to end.

A 2.5 per cent rate would only bring borrowing costs to the bottom end of what is the Bank of Canada’s best guess of the “neutral” rate — a level that is neither stimulative or contractionary. The central bank estimates this rate could be as high as 3.5 per cent, meaning there could be scope for even more increases beyond the four expected by investors.