Latest Finance-Economy News
Bank of Canada Holds Rate at 2.25%, Warns of Consecutive Hikes if Oil Prices Rise
The Bank of Canada kept its benchmark interest rate unchanged at 2.25% due to global uncertainty from the Iran war and U.S. trade policy. Governor Tiff Macklem indicated potential consecutive rate increases if Brent crude, at US$109/barrel, stays high to combat inflation.
If oil falls to US$75/barrel, inflation is projected to peak at 3% in April and return to 2% by early next year.
Bank of Canada Projects Modest GDP Growth Amid Volatility
Canada's economy is forecasted to expand 1.2% in 2026, 1.6% in 2027, and 1.7% in 2028, driven by resuming exports and business investment. The projection reflects a volatile global economy influenced by the ongoing Iran war.
Central bank cites these factors in maintaining steady rates.
U.S. Federal Reserve Maintains Fed Funds Rate at 3.5-3.75%
The FOMC decided to keep the target range for the federal funds rate at 3½ to 3¾ percent amid solid economic expansion. Inflation remains elevated due to rising global energy prices and Middle East developments adding uncertainty.
The Committee will assess incoming data for future adjustments while targeting 2% inflation and maximum employment.
Fed's Powell Plans to Stay on Board Amid Independence Concerns
Fed Chair Powell announced intentions to remain on the Federal Reserve board, emphasizing central bank independence. This follows an FOMC decision to hold rates steady, which saw the most dissents since 1992.
The move addresses ongoing debates over Fed autonomy.
FOMC Statement Draws Dissents from Key Members
Three FOMC members, including Hammack, Kashkari, and Logan, dissented against including an easing bias in the April 29 statement. They supported maintaining the current fed funds rate target.
Job gains remain low, with unemployment stable, amid elevated inflation.
Soaring Oil Prices from Iran War Threaten Global Inflation
Brent crude hit US$109 per barrel as the Iran war enters its third month, prompting central bank caution worldwide. Bank of Canada Governor Macklem warns of policy rate hikes if prices persist.
Middle East tensions contribute to economic uncertainty cited by the U.S. Fed.
U.S. Economic Activity Expands Solidly Despite Low Job Gains
Recent indicators show U.S. economic activity expanding at a solid pace, per FOMC statement. Job gains have been low on average, with unemployment little changed.
The Fed remains committed to its dual mandate amid inflation pressures.
Canada in Early Talks on Airport Privatization
Canada is in the early stages of discussions on potentially privatizing airports, according to a government minister. This comes amid broader economic policy reviews in a volatile environment.
No firm decisions have been announced yet.
Divided U.S. Fed Hints at Future Rate Cuts
The U.S. Federal Reserve held interest rates unchanged but signaled possible future cuts. This reflects internal divisions highlighted by recent FOMC dissents.
Ongoing global risks influence the outlook.
Global Economic Calendar Highlights Key Data Releases
Upcoming releases include U.S. ISM Manufacturing PMI, S&P Global PMIs, and ECB speeches on April 29-30. Australia's inflation data showed 3.7% YoY, below expectations.
Bond auctions and mortgage rates also featured prominently.
Federal Reserve Holds Closed Meetings on April 28-29
The Fed Board of Governors held a closed meeting starting April 28 and continuing April 29. Topics likely included monetary policy amid recent FOMC decisions.
This aligns with the steady rate announcement.
WestJet Flight Attendants Issue Dispute Notice After Failed Talks
WestJet flight attendants formally notified a dispute after negotiations failed, impacting labor in aviation. This adds to economic pressures in Canada's service sector.
Broader implications for business costs amid inflation.