The Bank of Canada surprised many economists this morning by maintaining its target for the overnight rate at 2.75%.

Most economists thought that the decision was a close call between a 25 basis point hike and no move. But, while the hike wasn’t seen as a slam dunk decision, the consensus was for the central bank to go ahead and ratchet rates higher.

In its policy statement, the bank noted that the Canadian economy continued its strong performance in the second quarter of the year and into the summer. Also, both core inflation and total CPI inflation in July were broadly in line with the bank’s expectations. And, stronger-than-expected growth in domestic demand in Canada continues, buoyed by the substantial amount of monetary stimulus in the economy.

However, it noted that it has decided to hold rates steady because “near-term prospects for growth in the United States and the major overseas economies appear to have weakened somewhat. There is also increased uncertainty associated with global financial market volatility and the unsettled geopolitical situation.”

Nevertheless, it suggested that more hikes are on the way. “Looking forward, it remains the Bank’s view that, as the Canadian economy continues to expand and to approach its production capacity, further measured reductions in monetary stimulus will be necessary in order to achieve the inflation control target of 2% over the medium term.”

The Bank’s next scheduled date for announcing policy interest rates is Oct. 16.