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Why Interest Rates Matter for Canadians

Interest rates are the single most powerful lever in Canada's economy.  When the Bank of Canada adjusts its policy rate, the effects reach every household—from the cost of carrying a mortgage to the return on a savings account. With rates currently at 2.25% and significant uncertainty ahead, understanding how rates work has never been more important for your finances. What Is the Bank of Canada's Policy Rate? The Bank of Canada sets the overnight policy rate—the interest rate at which major banks lend money to each other. This rate serves as a benchmark that influences borrowing and lending costs across the entire economy. When the Bank raises or lowers this rate, commercial banks adjust their prime rates accordingly, which directly affects the rates you pay on mortgages, lines of credit, and other loans. The Bank's primary goal is to keep inflation near its 2% target. When inflation runs too hot, the Bank raises rates to cool spending. When the economy slows, it cuts rates...
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Stock Market Pauses Near Records Ahead of Key Inflation Data

                                       

US stocks paused near record highs on Wednesday as investors awaited a crucial inflation report. The S&P 500 futures (ES=F) and Dow Jones Industrial Average futures (YM=F) were little changed, coming off fresh all-time highs. Meanwhile, contracts on the tech-heavy Nasdaq 100 (NQ=F) fell 0.3%.

The market is on edge as the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, is set to be released. Economists expect the "core" PCE, which excludes food and energy, to have risen to 2.8% in October from 2.7% in September. A print matching those expectations could dampen hopes for a rate cut in December.

Investors are also keeping an eye on updates on third-quarter GDP, durable goods data, and initial jobless claims. The mood is somewhat muted as the market winds down for the Thanksgiving holiday, with markets set to close early on Friday.

On the corporate front, Dell (DELL) shares plunged over 10% after quarterly revenue fell short amid declining PC demand. Peer HP (HPQ) also saw its stock drop 8% post-earnings. Automakers General Motors (GM) and Ford (F) were hit hard by Trump's tariff threats, with GM losing 9% and Ford dropping 3%.

As the market awaits the inflation data, the question remains: will inflation have stalled, as some officials believe, or will it continue to rise, complicating the Fed's path forward?




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