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Canada Holds Steady: Interest Rate Pause Signals Cautious Confidence

                      The Bank of Canada also held its policy rate at its last scheduled rate announcement in December. The Bank of Canada has opted to keep its key interest rate at 2.25% , a move that underscores a careful balancing act as the country approaches a pivotal moment in North American trade relations. With CUSMA (the Canada‑United States‑Mexico Agreement) negotiations on the horizon, policymakers appear intent on maintaining stability while assessing potential economic turbulence. The decision reflects a mix of optimism and prudence. Inflation has been easing gradually, giving the central bank some breathing room. At the same time, global economic uncertainty and the high stakes of upcoming trade talks mean officials are reluctant to introduce new variables into the financial system. By holding the rate steady, the Bank of Canada signals confidence in the economy’s underlying resilience while acknowledgin...
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Bond Investors Prepare for Fed Interest Rate Cuts

 

Bond investors are anticipating a change in the Federal Reserve’s interest rate policy, with expectations of multiple rate cuts this year and the first since the start of the COVID-19 pandemic in 2020. 

Portfolio managers have increased bets on long-duration U.S. Treasuries ahead of the meeting, reflecting expectations that yields on those securities will decline as the U.S. central bank moves toward cutting rates. 

As the economy slows, longer-duration bonds tend to outperform other assets. The Fed is widely expected to hold interest rates steady at the end of its two-day policy meeting on Wednesday, with some investors seeing a possibility that it could ramp up its dovish tone after it was perceived to have pivoted from a tightening policy outlook at its meeting last month.


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