Below, you will find our monthly market update and relative information that pertains to the current state of the economy.

Market Update

• All of the market indices closed lower than the beginning of the month.
  • • The S&P 500 finished at 5,954.50 pts (-1.42%)
    • The DOW finished at 43,840.91 pts (-1.58%)
    • The NASDAQ finished at 18,847.28 pts (-3.97%)
    • The TSX finished at 25,393.45 pts (-0.55%)

Canada

Monetary Policy

• On January 29^th, The Bank of Canada (“BoC”) decided to lower the overnight lending rate by 25bps.
  • Currently, the overnight rate is 3.00%, the Bank Rate is at 3.25%, and the deposit rate is at 2.95%.
    • Effective January 30^th, the deposit rate will be set at 5 basis points below the Bank’s policy interest rate to improve the effectiveness of monetary policy implementation.
  • This marked the BoC’s sixth straight rate cut with inflation coming down and economic growth stalling.
  • The next interest rate announcement will take place on March 12^th, 2025.

Economic Data

• Canada’s inflation rate rose to 1.9% in January from 1.8% in the previous month.
  • A rise in gasoline prices drove January’s increase. Food prices fell, in part due to the sales tax holiday.
• The core inflation rate, which excludes more volatile items (food and fuel), increased to 2.7% (up from 2.5% in December).

• Canada’s economy added 76,000 jobs in January, topping the 25,000 jobs expected by economists.

U.S.

Monetary Policy

• The Fed announced that there was no change to its federal rate in its January meeting.
  • The target range for the federal funds rate is 4.25-4.50%.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
• The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• The next Fed meeting of 2025 will take place on March 18^th-19^th.

Economic Data

• The annual inflation rate in the U.S. moved higher to 3.0% in January from 2.9% in the previous month, which was above economists’ expectations.
• A second estimate showed the U.S. economy grew at an annualized pace of 2.3% in the fourth quarter.
• The U.S. economy added 143,000 jobs in January, down from the 307,000 economists had expected.
• The U.S. unemployment rate dropped to 4.0% in January from 4.1% in the previous month.

Global

• The Bank of England (“BoE”) lowered its policy interest rate by 25 basis points (“bps”) to 4.50%.
  • All nine BoE officials voted for a rate cut, with two voting for a 50-bp reduction.

• A preliminary estimate showed the U.K. economy expanded by 0.1% over the fourth quarter of 2024, which surprised economists who were expecting a 0.1% contraction.
  • The slight pickup in growth from the third quarter came amid higher government spending. An increase in services sector activity also contributed to growth.
• A preliminary estimate showed Japan’s gross domestic product expanded by 0.7% over the fourth quarter of 2024, topping expectations.
  • This marked the country’s third straight expansion, boosted by strong business investment and net trade.

Notes From our Firm

• We wanted to reiterate that, in light of the ongoing tariff headlines, here is a great article from our one of our fund partners giving great insight into the matter (CLICK HERE).
• As marketing for DIY investor platforms grows, misunderstandings about fees and pricing have emerged. If you have questions about these misconceptions please reach out to us.

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

Yours Truly,

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity