- March 19, 2025
- Posted by: Melanie Scott
- Category: Market News
The Fed met expectations this afternoon by holding its interest rate at 4.5%, unchanged since December. President Trump’s tariffs, along with retaliatory measures from U.S. trading partners, have weighed on consumer sentiment and have been major contributors to inflationary pressures. The Fed acknowledged rising economic uncertainty, and are seemingly in sit-and-wait mode. In response, officials downgraded their 2025 economic growth forecast from 2.1% (December) to 1.7%. Markets are now pricing in no more than a 25 bps cut for the year. The Fed emphasized its ongoing intentions of maximizing employment and achieving the 2% inflation goal.
Yesterday in Canada, February CPI surged 1.1%, boosted by the mid-month reversal of the tax holiday, pushing annual inflation to an eight-month high of 2.6% YoY. The CAD’s rebound against the USD quickly lost momentum, with the pair closing just 0.07% above Monday’s close. Market sentiment suggests a limited upside for the CAD until the next tariff update on April 2nd.
Looking ahead, Australian employment data is due overnight, followed by the BoE’s rate decision tomorrow at 8:00 AM EST, where the UK is expected to mirror the Fed’s hold at 4.5%. The week wraps up with Canadian retail sales data on Friday at 8:30 AM EST.
Current Market Conditions:
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