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The Bank of Canada (BoC) met on Wednesday, June 4, with a muted announcement: the overnight lending rate would remain unchanged at 2.75 per cent.
Following the BoC’s rate decision, Governor Tiff Macklem said, "Uncertainty remains high, the Canadian economy is softer but not sharply weaker, and we have seen some firmness in recent inflation data.” These comments offered little clarity for those watching for signs of a policy shift. A great deal still depends on the United States and our ongoing trade negotiations with them.
U.S. Federal Reserve Chair Jerome Powell spoke earlier in the week on Monday at the Reserve Board’s International Finance Division, 75th Anniversary Conference. His speech was preceded by rampant weekend speculation on platforms like X. Some voices in the cryptocurrency space had anticipated, or perhaps simply hoped, that Powell might step down, but these rumors proved unfounded. The commentary on social media platforms highlight a challenge we face in distinguishing credible information from the noise in financial markets.
Global market participants are keeping an eye on America and the renewed tariff discussions under President Donald Trump. With many countries involved in negotiations, including Canada, China, and the United Kingdom, it remains unsettled which sectors will face increased tariffs. It’s also uncertain how quickly any changes would take effect or how long they would remain in place.
The Federal Reserve will make its next rate announcement on June 18. American members will soon enter the standard blackout period, which limits public commentary ahead of the meeting. Some market watchers expect the current dynamic between the Federal Reserve and the U.S. administration to continue, potentially keeping rates at 4.33 percent. However, outcomes will depend on incoming data and broader economic developments.
The Bank of Canada will meet again on July 30 and plans to return to its typical format, which includes the release of the quarterly Monetary Policy Report (MPR). The April MPR was postponed, due to the even higher level of ambiguity regarding trade and tariffs at that time.
Canadian central bank decisions do not directly influence global crypto market movements but they can influence investor sentiment here at home. Higher interest rates typically reduce investor appetite for risk-on assets, including digital assets. This is why traders and long-term investors may continue to watch macro signals in an attempt to better understand our financial environment and what’s ahead.
Newton publishes educational blog updates written by Canadians for Canadians. Whether you are new to crypto or looking to stay informed, you will find beginner-friendly insights, market trends, and updates that reflect Canada’s regulatory landscape. Visit Newton’s platform to learn more.
