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 5,611.85 pts (-5.75%)
    • The DOW finished at 42,001.76 pts (-4.20%)
    • The NASDAQ finished at 17,299.29 pts (-8.21%)
    • The TSX finished at 24,917.50 pts (-1.87%)

Canada

Monetary Policy

• On March 12^th, The Bank of Canada (“BoC”) decided to lower the overnight lending rate by 25bps.
  • Currently, the overnight rate is 2.75%, the Bank Rate is at 3.00%, and the deposit rate is at 2.70%.
  • The BoC expects Canada’s economy to slow amid global trade tensions. With the tax holiday ending, Canada’s inflation rate may pick up.
  • The BoC believes its rate cuts helped boost growth over the second half of 2024. However, extensive tariffs from the U.S. could drag down growth.
  • The next interest rate announcement will take place on April 16^th, 2025.

Economic Data

• Canada’s inflation rate rose to 2.6% in February from 1.9% in the previous month.
• The core inflation rate, which excludes more volatile items (food and fuel), increased to 2.9% (up from 2.7% in January).
• The Canadian economy grew more than expected in January, expanding by 0.4%.
  • Gains in the oil, gas extraction and mining industries helped boost growth over the month.
• Canada’s unemployment rate remained unchanged at 6.6% in February.

U.S.

Monetary Policy

• The Fed announced that there was no change to its federal rate in its February 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.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The next Fed meeting of 2025 will take place on May 6^th-7^th.

Economic Data

• The annual inflation rate in the U.S. dropped to 2.8% in February from 3.0% in the previous month.
  • February’s slowdown was driven by a decline in gasoline prices. The price growth for shelter and transportation slowed. Conversely, the growth in food prices accelerated.
• The U.S. unemployment rate rose to 4.1% in February from 4.0% in the previous month.
• On April 2^nd, the U.S. administration announced new tariffs under the IEEPA (what is IEEPA?), declaring the trade deficit a national emergency.
  • Starting April 5^th, a 10% base tariff will apply to all imports, with higher, country-specific tariffs taking effect on April 9^th.
  • Canada and Mexico were exempt from these new tariffs. Goods from Mexico and Canada that meet USMCA (what is USMCA?) rules stay tariff-free, except for auto exports and steel and aluminum which fall under separate tariff policies.

Global

• The European Central Bank (“ECB”) lowered interest rates at its March meeting, seeking to support Europe’s economy.
  • The ECB lowered its main refinancing rate by 25 basis points (“bps”) to 2.65%. The ECB also lowered its deposit facility rate and marginal lending facility rate by 25 bps.
• The Bank of England (“BoE”) held its key interest rate steady at 4.50%.
  • Inflation remains persistently high in the U.K., rising to 3.0% in January, above the BoE’s target. The unemployment rate was unchanged at 4.4% in January, while job additions accelerated.

Notes From our Firm

• If at any time, you have questions or concerns about anything you’ve heard or read, please feel free to reach out to our firm for clarity and further information.
• We are closely monitoring the markets, our portfolios, and the potential impact of global and local developments.
• Challenging times like these are when our firm’s value shines, backed by over 50 years of experience in the industry.

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