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Bank of Canada Freezes Rates as Trump’s Tariff Threat Looms Over Economy

Bank of Canada Holds Rates Steady Amid Tariff Turmoil In a widely anticipated move, the Bank of Canada has opted to maintain its benchmark interest rate at 2.75% for the third consecutive time, as trade tensions with the United States intensify ahead of an August 1 tariff deadline. Economists had unanimously predicted the hold, citing mixed economic signals: while employment remains strong, core inflation continues to hover above the Bank’s target. Governor Tiff Macklem emphasized that monetary policy cannot offset the impact of prolonged trade conflicts, reiterating the Bank’s commitment to price stability for Canadians. The decision comes as President Trump threatens sweeping tariffs on Canadian goods, including a potential 35% blanket rate and sector-specific levies on steel, aluminum, and autos. These measures have injected uncertainty into business planning and consumer confidence, with many firms scaling back hiring and investment. Despite the hold, analysts warn that further...
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Market Momentum Stalls as Investors Weigh Inflation Data and Fed Outlook

The recent rally in U.S. stocks took a breather on Wednesday as investors digested a softer-than-expected inflation report and assessed the implications for Federal Reserve policy. The Dow Jones Industrial Average remained flat, while the S&P 500 slipped 0.3%, and the Nasdaq Composite led declines, falling 0.5%.  

The latest Consumer Price Index (CPI) data showed inflation rising 0.1% month-over-month, below the expected 0.2% increase. Core inflation, which excludes food and energy, remained steady at 2.8% year-over-year. This cooler-than-anticipated inflation reading fueled speculation that the Fed might move toward an interest rate cut later in the year.  

Investor sentiment was also shaped by ongoing U.S.-China trade negotiations, which aim to revive a tariff truce. While the framework agreement was announced, details remain unclear, leaving markets uncertain about its long-term impact.  

Meanwhile, Treasury yields declined, with the benchmark 10-year yield falling to 4.41%, reflecting increased expectations of monetary easing.  

Despite the pause in the rally, analysts remain optimistic about the broader market trajectory, with the S&P 500 and Nasdaq hovering near record highs amid hopes for economic stability and potential trade resolutions.  


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