A Bank of Canada deputy may have signaled the central bank is on track to raise interest rates in two weeks’ time.

Taking questions after a speech on Wednesday, Deputy Governor Tim Lane was asked about potential timeline for reducing the central bank’s balance sheet. The Bank of Canada would consider it once it starts to raise interest rates, he said, then stopped just short of saying policy changes are coming at the next decision on March 2.

“We’re going to certainly consider starting that process fairly... We’ll be doing that as soon as we’re starting to raise rates,” he said. “Quite likely we’ll be saying something about that in a couple weeks time when we’re actually at the stage of changing our, uhh... When we’re actually at our next decision point.”

The Bank of Canada is widely expected to start a rate-hike cycle at the next policy meeting. Markets are pricing in as many as seven increases in borrowing costs over the next 12 months.

Paul Badertscher, a spokesman for the central bank, said by email no policy decision has been made by the bank’s governing council.

“Governing Council follows a clear deliberation process for every policy decision,” Badertscher said. “Decisions are taken at the end of governing council’s deliberations, and the deliberations for the March 2 announcement have not yet happened.”

In the speech, Lane said the central bank is “alert” to the possibility that inflation could prove to be more sticky than forecast, and officials are prepared to adapt their policies if needed.

He highlighted the importance of agility in decision making, citing how the central bank adjusted policy during its pandemic response as inflation came in faster than expected. While the Bank of Canada anticipates consumer price gains will fade, Lane said policymakers are more concerned about upside risks to their forecasts.

“While we now expect supply disruptions to ease and inflation to come down quickly in the second half of this year, we are alert to the risk that inflation may again prove more persistent,” Lane told the University of Calgary. “We will be nimble -- and if necessary, forceful -- in using our monetary policy tools to address whatever situation arises, as we have done throughout these turbulent times.”

The remarks appear to be an attempt to assure Canadians and investors that despite their optimism that inflation will prove to be temporary, policy makers are prepared to act quickly if they are wrong. Statistics Canada reported earlier that inflation hit 5.1 per cent in January, a three-decade high.