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Market Volatility: Stocks Flatten as Powell's Remarks Weigh on Gains

The stock market experienced a turbulent session on Wednesday, ultimately closing near flat after Federal Reserve Chair Jerome Powell's comments on monetary policy and inflation concerns. The S&P 500 ended nearly unchanged , giving back earlier gains as investors digested Powell’s remarks on the Fed’s stance regarding interest rates and economic restraint. Powell reiterated that the central bank remains cautious about inflation, particularly in light of tariff-driven price increases expected over the summer. While the Fed signaled that borrowing costs are likely to decline this year, the pace of future rate cuts appears to be slowing.  Following Powell’s speech, U.S. Treasury yields reversed their earlier declines , influencing market sentiment. The Dow Jones Industrial Average fell 43.83 points (0.10%) , while the Nasdaq Composite managed a slight gain of 23.66 points (0.12%).  Investors also kept a close eye on geopolitical developments, particularly tensions in the Midd...
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Economists Predict Further Decline for the Canadian Dollar in 2025


As 2024 draws to a close, economists are sounding the alarm about the Canadian dollar, commonly known as the loonie, which could see further declines in 2025. The loonie has already dropped below 70 cents US, reaching its lowest level since March 2020. This downward trend is driven by several factors, including political uncertainty, economic divergence between Canada and the United States, and interest rate differentials.

Karl Schamotta, chief market strategist at Corpay, predicts a turbulent period ahead for the Canadian dollar. He attributes the loonie's weakness to the outperforming U.S. economy, which is attracting more investments south of the border. Additionally, the Bank of Canada's aggressive interest rate cuts to support the domestic economy have made the Canadian dollar less attractive to global investors.

The upcoming U.S. presidential term under Donald Trump adds another layer of uncertainty. Trump's proposed tariffs on Canadian imports could further weaken the loonie if implemented. However, there is a possibility of a modest rebound later in 2025 as the Bank of Canada's rate cuts may renew activity in the Canadian housing market and consumer spending.

While a weaker loonie can benefit Canadian exporters by making their goods cheaper abroad, it also increases the cost of imports and travel for Canadians. The balance between these factors will be crucial in determining the loonie's performance in the coming year.

Economists advise caution and suggest that businesses and consumers brace for potential volatility in the currency markets. The coming months will be critical in shaping the loonie's trajectory, and only time will tell if the Canadian dollar can regain its strength.


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