The Bank of Canada cut overnight interest rates by 25 basis points to 2.75%, the lowest since July 2022.

It’s the seventh interest rate cut in the current BOC monetary easing cycle, as inflation remained near the bank’s 2% target. 

Current inflation rates hover around 1.9%, and it comes amid uncertainty in the market and economic disruptions as US President Donald Trump imposes tariffs on steel and aluminum, which went into effect on Wednesday.

Trump repeatedly imposed 25% tariffs on Canada and Mexico and delayed them amid ongoing negotiations with both governments.

The Bank of Canada said that the economic outlook remains uncertain due to the fast changing political landscape, but cautioned that monetary policies couldn’t compensate for the impact of the trade war.

On Sunday, the governing Liberal party chose Mark Carney, the former governor of both Banks of Canada and England, as the new Prime Minister, and he vowed to “build a strong economy in the G7 group”.

Carney is expected to call for early elections, likely in April or May. 

The Energy Information Administration reported a buildup of 1.4 million barrels in US crude stocks last week to a total of 435.2 million barrels, while analysts expected a buildup of 1.2 million barrels. 

Gasoline stocks fell by 5.7 million barrels to 241.1 million barrels, as distillate stocks fell by 1.6 million barrels to 117.6 million barrels. 

Most US stock indices lost ground on Wednesday markets assess latest inflation data.

US consumer prices rose 2.8% y/y in February, below estimates of 2.9%, and down from 3% in January.

President Donald Trump implemented new 25% tariffs on steel and aluminum imports from around the world, triggering retaliations and concerns about further hits to US economic sentiment. 

Canada’s government is planning additional tariffs on 20 billion Canadian dollars worth of American products, while the EU announced similar retaliatory tariffs on a variety of US products.

On trading, Dow Jones fell 0.8% as of 15:15 GMT, or 360 points to 41,071 points, while S&P 500 shed 0.3%, or 16 points to 5556 points, as NASDAQ rose 0.2%, or 28 points to 17,465 points. 

Bitcoin rose on Wednesday away from four-month lows while settling above $80,000 on positive sentiment after more purchases by major corporations. 

Now markets await mainline US inflation data for February, expected to provide fresh clues on the odds of a Fed rate cut in upcoming months.

Prices

Bitcoin rose 0.95% at Bitstamp today to $83,733, with a session-low at $81,268.

On Monday, bitcoin rose 5.5%, the first profit in six days away from a four-month trough at $76,600.

Crypto Market Value 

The market value of cryptocurrencies rose by $30 billion today to $2.795 trillion.

MetaPlanet 

Japan’s MetaPlanet continued to expand its holdings of bitcoin with the purchase of 162 additional units at a value of $13.5 million, averaging $83,123 per unit, with the company’s total holdings rising to 3050 units, valued at $253.7 million.

It’s a similar strategy to MicroStrategy’s bitcoin purchases, indicating increasing institutional trust in the cryptocurrency.

US Rates

Fed Chair Jerome Powell said it remains to be seen whether Trump’s tariff plans will be inflationary. 

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 3%.

Now investors await important US inflation data this week to gather more clues.