The Bank of Canada’s No. 2 official said policymakers need time to assess whether they’ve raised borrowing costs enough to curb inflation, reiterating that their path on rates can differ from peers.

In the first speech after keeping interest rates unchanged for the first time in nine meetings, Senior Deputy Governor Carolyn Rogers said Thursday that while officials have seen a “mixed picture” of economic data since January, “things are unfolding broadly in line” with the central bank’s forecast.

“We’ll need to see more evidence to fully assess whether monetary policy is restrictive enough to return inflation to 2 per cent,” she said in a speech to the Manitoba Chambers of Commerce in Winnipeg.

The comments suggest policymakers are comfortable keeping borrowing costs at current levels, but that the conditional hold isn’t set in stone. Rogers acknowledged there are conflicting signals from the economy as well as global pressures.

Speaking to reporters after the speech, she said Canada’s economy is still in excess demand and the labor market is “surprisingly tight.” But higher borrowing costs are weighing on rate sensitive sectors such as housing, and are starting to rebalance the economy, she said.

On Wednesday, Governor Tiff Macklem made good on a January pledge to hold the benchmark overnight rate at 4.5 per cent, the first pause among Group of Seven central banks in this tightening cycle. Policymakers have said they’re prepared to hike again if there’s an “accumulation of evidence” that the economy and inflation aren’t cooling down as forecast.

‘All About the Data Now’

After the decision, traders in overnight swaps markets increased bets that the Bank of Canada could be forced to move as early as its April meeting, as the U.S. Federal Reserve pushes rates higher.

“The risks remain very much skewed to further hikes,” Benjamin Reitzes, a rates and macro strategist at Bank of Montreal, said by email. “If the data are firm over the next six weeks, it sounds like April would be on the table. It’s all about the data now.”

Near-term outlooks for growth and inflation in the U.S. and Europe are now “somewhat higher than we expected in January,” Rogers said. “Since these are our main trading partners, this could point to some further inflationary pressure in Canada.”

Rogers acknowledged the widening divergence in policy between Canada and the U.S. during a question-and-answer session after the speech, saying that the resulting depreciation in the loonie could add to inflationary pressures.

“If that happens, that’ll have to get built into our forecasts,” Rogers said. The Canadian dollar hit its lowest level since October on Thursday.