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The big question today is whether Bank of Canada Governor Mark Carney will take a 'hawkish' turn and indicate that he may start lifting his benchmark rate from the current 1 per cent sooner than Bay Street analysts expect, which for most is not until the second half of 2013

Stranger things have happened, but you can pretty much bet your house (or, your maxed-out home-equity line of credit) that Mark Carney will not raise interest rates today when the Bank of Canada governor releases his latest decision at 9 a.m. in Ottawa.

That said, the statement explaining his decision will be meatier than usual, since it comes a day before the central bank releases a quarterly forecast. Specifically, it will contain some of Mr. Carney's new projections for inflation, as well as for Canadian and U.S. economic growth.

The big question is whether it will take a "hawkish" turn and indicate that he may start lifting his benchmark rate from the current 1 per cent sooner than Bay Street analysts expect, which for most is not until the second half of 2013.

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Policy makers are grappling with a perception that their warnings about household debt are not having enough effect on consumer behaviour, plus the reality that as long as the U.S. Federal Reserve is expected to be on hold until late 2014, every Canadian interest-rate move risks sending the already-too-high currency skyward. But they are caught between a strengthening domestic economy and a global backdrop which now looks a bit shakier than it did a few weeks ago. So, it's a tough call whether the bank will offer much of a hint just yet.

Here is a primer on potential clues that I'll be looking for in the statement:

Canadian projections:

In January, the central bank said the economy will grow 2 per cent this year, and 2.8 per cent in 2013, with all the remaining "slack" being fully absorbed by the third quarter of 2013. The last point is important because theory holds that rates should be at a so-called neutral level by then, or inflation could spin out of control. (Most economists define neutral as between 3 or 4 per cent, although many say it could be lower.)

Recent evidence on the ground and a string of sunny comments from Mr. Carney suggest he will boost his 2012 growth forecast a notch or two. That doesn't necessarily mean he will move up the timeline for the economy to be back at full tilt, though, because many analysts say he may downgrade his 2013 forecast. A shorter timeframe for the economic slack to be chewed up -- say, early 2013 instead of the third quarter -- would suggest a rate hike is approaching.

Global backdrop:

Since his last decision on March 8, Mr. Carney has sounded optimistic about the landscape outside Canada's borders, while remaining concerned about the impact the strong loonie is having on exporters. In his last major speech, on April 2 in Waterloo, Ont., Mr. Carney said "considerable external headwinds have abated somewhat." Specifically, the euro crisis is "far from resolved," but has "moved from the acute to the chronic," he said. He also pointed to "encouraging" data in the U.S.

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But that was before a week of mixed economic news in the U.S., renewed fears that the euro crisis could flare up again, and signs that China is slowing more than thought. If he sounds any more bullish on global prospects, this could be a hint that rate hikes are coming. More likely, analysts say, he will sound relatively upbeat, while continuing to caution that a host of factors (including high oil prices) threaten to delay or thwart further progress.

The all-important last paragraph:

When the central bank wants to send a crystal-clear signal on rates in one direction or the other, it does so in one key sentence in the last paragraph of the statement. On March 8, that sentence read: "With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary stimulus in Canada." And in the April 2 speech, Mr. Carney stated that the central bank will take "whatever action is appropriate to achieve the (2-per cent) inflation target over the medium term."

That last comment fuelled talk that Mr. Carney was gearing up to shift his stance, or at least that he does not want markets to assume he is squeamish about raising rates until the Fed is closer. An even clearer clue that he is preparing the ground for rate hikes would be if he outright says that some of that "considerable stimulus" could be pulled away at some point. For example, last July -- before escalating debt dramas on either side of the Atlantic Ocean came close to scuttling the global rebound -- Mr. Carney ended a statement with: "To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn."

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