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TSX Slumps as Central Banks Hold Steady

  Canada’s Main Index Suffers Sharpest Drop Since May The Toronto Stock Exchange’s S&P/TSX composite index fell 169.92 points, or 0.6%, to close at 27,369.96 on Wednesday, marking its steepest single-day decline in ten weeks. The drop followed a record high the previous day, underscoring investor unease as both the U.S. Federal Reserve and the Bank of Canada opted to keep interest rates unchanged. The materials sector led the retreat, sliding 2.1% amid tumbling copper and gold prices. Financials and technology also posted losses, down 0.6% and 0.5% respectively, as eight of the index’s ten major sectors ended in the red. Market sentiment soured after the Fed’s decision to hold rates steady offered no clear timeline for future cuts, disappointing investors hoping for dovish signals. Meanwhile, the Bank of Canada maintained its benchmark rate at 2.75% for the third consecutive meeting, citing reduced risks of a global trade war. Among individual stocks, Capital Power Corp sa...
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Fed Holds Rates Steady, Signals Two Cuts Ahead in 2025



The U.S. Federal Reserve announced Wednesday that it will keep interest rates unchanged, maintaining its benchmark range at 4.25% to 4.5% for the fourth consecutive meeting. Despite concerns over inflation and slower economic growth, officials reaffirmed their expectation of two rate cuts later this year, with projections indicating a year-end rate of **3.9%.  

The Fed's latest forecast suggests inflation will rise to 3% by the end of 2025, up from the 2.7% projected in March. Additionally, the unemployment rate is expected to reach 4.5%, slightly above the previous estimate of 4.4%. Economic growth projections have also been revised downward, with GDP now expected to expand by 1.4%, compared to the earlier forecast of 1.7%.  

Federal Reserve Chair Jerome Powell emphasized the central bank's cautious approach, stating that while inflation remains a concern, the Fed is committed to balancing economic stability with necessary policy adjustments. The decision comes amid ongoing uncertainty surrounding global trade policies and geopolitical tensions, which continue to impact financial markets.  

With two rate cuts still anticipated before the end of the year, investors and businesses will closely monitor upcoming Fed meetings for further guidance on monetary policy shifts.

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