The Bank of Canada raised its key interest rate for the second time this year on Wednesday after what many analysts saw as a coin-flip decision.

Here's a round-up of how Bay Street is reacting to the central bank's move up to one per cent:

“The Bank of Canada took the fast lane in returning rates to 1.0%, hiking 25bp when most were expecting a hold until October. And there were maybe fewer hints of a prolonged pause in hikes from here than we would have expected, now that rates are back to where they stood before the oil shock.”

- CIBC Capital Markets Economist Andrew Grantham

"It’s called the Bank of Canada, not the ‘Bank of the Greater Toronto Area’. They’re certainly not going to carry out policy because of the housing market in one region... If the Bank of Canada was truly concerned only about Toronto housing coming off the bubble levels that we had in the spring, they wouldn’t have raised rates today."

- Gluskin Sheff + Associates Chief Economist and Strategist David Rosenberg

Bank of Canada hike in October or December still possible: Rosenberg

David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates, says he wouldn't rule out either an October or December rate hike from the Bank of Canada.

"Canada's economy has been coming in hot of late, with emergency level interest rates no longer warranted. While an argument could be made that holding off a few weeks for the opportunity to more fulsomely explain how the outlook for the economy has evolved, this clearly did not hold sway in Ottawa today."

- TD Senior Economist Brian DePratto

“Given today’s abrupt hike, with no prior communication since the previous meeting, and the Bank’s seeming care-free stance on the soaring Canadian dollar, we can’t rule out anything in coming meetings.”

- BMO Capital Markets Chief Economist Doug Porter

-  Frances Donald, Senior Economist, Manulife Asset Management

“It’s not a meeting where we have a press conference or a [monetary policy report], so it’s rather unusual that we have seen the bank decide to move today. But it probably was the strength of the Q2 GDP numbers that we had recently that probably tipped the balance of opinion on the governing board towards a rate increase today.”

- Shaun Osborne, chief FX strategist, Scotiabank

Loonie flirts with 82 cents US on BoC's rate hike

BNN speaks with Shaun Osborne, chief FX strategist at Scotiabank. He says there's been a big swing in sentiment on the loonie, and that the rapid appreciation in the Canadian dollar suggests the prospect of the currency to appreciate further is quite limited at this stage.

“While we can’t rule out another rate hike before the end of this year, we should note that the economy is still overly dependent on the heavily indebted household sector to support economic growth. …With the housing market teetering even before rates began to rise, we expect the economy to lose momentum before the year is over, prompting the Bank to abort its rate hike cycle.”

- David Madani, Senior Canada Economist, Capital Economics 

"Back to anti-forward-guidance communication methods... we think that by hiking at successive meetings, and hiking in September without the least piece of communication in six weeks, the BoC might have a hard time persuading the market about any idea of gradualism, and even less on predictability. This effectively means that any meeting might be treated as a close call going forward." 

- Jimmy Jean, Senior Economist, Desjardins Group

“One or two rate hikes? Not the end of the world. It's going to have a negative impact slightly, marginally on home prices... You start talking about 100 basis points, 150-basis-point hikes? Now that's going to push down home prices.”

- Rob McLister, founder, RateSpy.com

What the Bank of Canada's rate increase means for housing

Rob McLister, founder of RateSpy.com, gives his instant analysis of what the Bank of Canada's rate hike to one per cent means for Canadian housing and mortgages.