Recent upward pressure on Canadian inflation, which rose to 2.4% year-over-year in March driven by elevated energy prices linked to Middle East developments, has introduced a modest hawkish tilt into Bank of Canada policy expectations and supported the near-even market-implied odds for at least one rate hike this year. The central bank held its overnight rate steady at 2.25% in April while signaling patience amid weak GDP growth and limited pass-through to core measures, yet traders remain attentive to the risk that persistent commodity shocks could push headline readings above 3% and prompt tightening. Key upcoming catalysts include the June 10 policy decision and subsequent inflation releases that will clarify whether the current stance remains appropriate or requires adjustment to anchor longer-term expectations.