Quick Facts
- Bank of Canada cuts overnight rate by 0.25% to 1.75%
- US inflation data shows a slight reprieve from rising prices
- Bank of Japan expected to maintain its stance on interest rates
- Gold prices reach near-record highs amidst global uncertainty
Bank of Canada’s Warnings
The Bank of Canada’s Deputy Governor, Tiff Macklem, issued a stern warning about the potential impact of tariffs on the Canadian economy.
US Inflation Data
The US inflation data for February showed a slight reprieve from the rising prices that have been plaguing the economy. The consumer price index (CPI) rose by 0.2% in February, lower than the 0.3% increase predicted by economists. The core CPI, which excludes food and energy prices, also rose at a slower pace of 0.1%.
Bank of Canada Rate Cut
In a move that caught many by surprise, the Bank of Canada decided to cut its overnight rate by 0.25% to 1.75%. This decision was attributed to the bank’s concern about the ongoing uncertainty surrounding the US-China trade war and its potential impact on the Canadian economy.
Deputy Governor Tiff Macklem warned that a “severe” tariff impact could undermine Canada’s economic growth, particularly in the manufacturing sector.
Bank of Japan Expected to Hold
In contrast, the Bank of Japan is expected to maintain its status quo on interest rates next week, with no changes anticipated in its monetary policy.
Gold Prices
As investors fled to safe-haven assets amidst the global uncertainty, gold prices reached near-record highs. The yellow metal has been on a tear lately, benefiting from the ongoing trade tensions and concerns about economic growth.
