The yield on the 10-year Treasury is closing in on 3%—a threshold that’s been crossed only briefly in the past seven years. Canadian 10-years are also up, by roughly 30 basis points so far this year.

A contributing factor to rising yields in both the U.S. and Canada is a “quiet upward drift in both headline and core inflation,” says BMO chief economist Douglas Porter, in a weekly financial digest. Last week, StatsCan reported that Canada’s inflation rate hit 2.3% in March.

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Though Porter doesn’t foresee a looming “big bounce” in inflation, he says that “the risks of such a bounce have clearly increased.” For example, adding to inflation pressures are strong oil prices and global trade tariffs.

Analyzing the data, RBC senior economist Nathan Janzen says in an economic update that recent trends underlying inflation are stronger than year-over-year rates imply. “Month-over-month gains in ex-food-and-energy prices have averaged 2.9% at an annualized rate over the last six months,” he says. “That’s the highest in 15 years.”

He expects economic data to continue to improve enough to justify “further modest removal” of monetary policy stimulus.

Though Porter’s not bearish on bonds, “the underlying upward [yield] trend will stick for some time,” he says. The 10-year Treasury will inevitably pierce 3% soon, and Canadian 10-years will likely return 3% by late next year, says Porter—especially if NAFTA news continues to improve.

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He’s calling for two more rate hikes from the Bank of Canada, with the next one likely coming in July.

In a monthly fixed income report, Paul-André Pinsonnault of National Bank says that once uncertainties about NAFTA and housing lift, the BoC may “quickly deliver a rate hike.” He forecasts two more hikes in 2018, with Canadian 10-years trading at 2.68% by year-end.

In contrast, CIBC’s call is for one more hike.

Referring to the BoC’s revised forecasts for GDP in its April monetary policy report, CIBC economists Katherine Judge and Andrew Grantham say in a weekly economics report, “A sizable downward revision in expected Q1 growth, from 2.5% to 1.3%, along with upward revisions to potential real GDP growth, suggests the [central] bank thinks there is more slack to chew through than previously envisioned. That will work to tame near-term rate hike expectations.”

They expect a sole remaining hike in July, adding that “the revisions should calm investor appetite for the loonie.”

TD senior economist James Marple expects at least one more BoC hike this year, saying in a weekly economics report that some economic data suggest upside to the central bank’s dreary outlook for Q1 GDP, such as recent readings for manufacturing sales and retail sales volumes.

“The data support the notion that growth will rebound convincingly in the second quarter, something the data-dependent central bank is looking to see for confirmation that further increases in its key interest rate are warranted,” says Marple. “On balance this supports the case for at least one more hike this year, which we expect to come in July.”

(On the downside for Q1 GDP, today’s wholesale sales for February were soft.)

Scotiabank also forecasts the next hike for July, but says strong economic data are worth watching closely. “The May 30 [BoC] meeting remains live on the back of the broad set of figures with a lot of information on fundamentals, prices and NAFTA ahead of us over the next six weeks,” says Derek Holt, vice-president and head of capital markets economics at Scotiabank in an economics report. Scotiabank forecasts two more hikes this year, as indicated in its forecast tables.

Read the full reports from BMO, RBC, National Bank, CIBC, TD and Scotiabank.

Also read:

What investors can learn from Q1 results