The Globe and Mail reports in its Thursday edition that the Bank of Canada kept its policy rate at 2.25 per cent on Wednesday, even as headline inflation rose to 3.2 per cent in May from 2.8 per cent in April, exceeding its 1- to 3-per-cent target range. The Globe's guest columnists Jeremy Kronick and Steve Ambler write that the instinct with these inflation numbers might be to hike, since last time inflation rose above 3 per cent in 2021, it reached 8 per cent. However, the situations differ. Keeping the rate at 2.25 per cent was the right choice, and a rate cut may be needed before considering a hike. In March, 2021, headline inflation was 2.2 per cent, just north of 2 per cent. A month later, it rose to 3.4 per cent. Back then, core inflation measures were also on the rise, going beyond 3 per cent by July and August, up from 2.4 and 2.3 per cent in March, 2021. This time around, core inflation has been decreasing, with CPI-trim at exactly 2 per cent and CPI-median at 2.1 per cent. This makes it easier for the bank to argue, as it did in its announcement, that the spike in oil prices is the primary driver of headline inflation above 3 per cent, that it has not spread to other sectors and is therefore temporary.