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Indeed, the most recent Bank of Canada consumer and business outlook surveys reflected that both consumers and businesses expect price pressures to persist for longer. Policymakers iterated that front-loading rate hikes should limit economic damage as the cost of restoring price stability will be higher if inflation becomes entrenched. With rates now at the neutral setting, the Bank says they expect to continue hiking to bring inflation back towards target levels. In its statement, the Bank cited an economy in excess demand and higher inflation expectations as the primary reasons for front-loading rate hikes. Before the meeting, markets were leaning towards a 75bps move with an outside chance of a smaller 50bps hike similar to previous meetings.

#DOW MARKET WATCH FULL#

The Bank of Canada (BoC) surprised markets on Wednesday by raising interest rates by a full percentage point to 2.5%, the most since 1998, as it looks to rein in the fastest inflation in decades. In Canada, the TSX lost 694 points to end at 18,329.īank of Canada (BoC) surprised markets by raising interest rates a full percentage point to 2.5%

Losses Continue to Mount for North American Indexesįor the four trading days covered in this report, the Dow lost 708 points to close at 30,630, the S&P 500 dropped 109 points to settle at 3,790, while the tech-heavy Nasdaq fell 384 points to close at 11,251. In Canada, the TSX fell 286 points, weighed down by commodity weakness and fears that the Bank of Canada’s 100-basispoint rate hike will negatively impact mortgage growth at financial institutions. By Thursday’s close, the S&P 500 declined 11 points, the Dow dropped 142 and the Nasdaq finished flat. stock indexes fell sharply after Thursday’s open but rallied throughout the day to close mixed. The Nasdaq and the SPX were finished essentially flat, while the Dow, and TSX recorded minor losses. The latest Consumer Price Index (CPI) data could force the Fed to move aggressively at its July policy meeting.Īlthough North American equity markets turned sharply lower after the release of the CPI data, all four major indexes pared losses throughout the day to close slightly in the red.

On a month-to-month basis, core prices rose 0.7% in June, a sign of widespread inflationary pressures. consumer inflation rose 9.1% in June, year over year, the fastest pace since November 1981.

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