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

Market Update

• All the market indices closed lower than the beginning of the month.
  • • The S&P 500 finished at 6,528.52 pts (-5.09%)
    • The DOW finished at 46,641.51 pts (-5.38%)
    • The NASDAQ finished at 21,590.63 pts (-4.75%)
    • The TSX finished at 32,768.04 pts (-4.58%)

Canada

Monetary Policy

• On March 18^th, The Bank of Canada (“BoC”) decided to leave the overnight lending rate unchanged.
  • Currently, the overnight rate is 2.25%, the Bank Rate is at 2.50%, and the deposit rate is at 2.20%.
  • “Governing Council decided to maintain the policy rate at 2.25%. With recent data pointing to weaker economic activity and uncertainty elevated, risks to growth look tilted to the downside. At the same time, inflation risks have gone up due to higher energy prices. We will continue to assess the impact of US tariffs and trade policy uncertainty, and how the Canadian economy is adjusting. We are also monitoring the unfolding conflict in the Middle East closely and assessing its impact on growth and inflation.”
  • The next interest rate announcement for 2026 will take place on April 29^th.

Economic Data

• Canada’s economy lost 83,900 jobs in February (the most since January 2022). The full-time sector lost 108,400 jobs, while the part-time sector added 24,500 jobs.
  • Canada’s unemployment rate rose to 6.7% in February from 6.5% in January.
• Canada’s annual inflation rate softened to 1.8% in February from 2.3% in the previous month, which was also below the 1.9% rate economists had expected.
• Canada’s economy expanded by 0.1% in January, marking its second consecutive expansion after posting no growth in November.
  • Contributing to growth were improvements in activity in the construction, retail, and mining industries.
  • Conversely, a drop in wholesale trade and transportation detracted from growth.

U.S.

Monetary Policy

• The Fed decided to leave the target range for the federal funds rate unchanged in its March meeting.
  • The target range for the federal funds rate is 3.50-3.75%.
• “The Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
• The next Fed meeting will take place on April 28^th & 29^th.

Economic Data

• The annual inflation rate in the U.S. was unchanged at 2.4% in February, holding at its lowest level since May 2025. Economists were expecting the 2.4% rate.
  • A rise in energy prices was offset by a drop in prices for used cars and trucks.
• The annual core inflation rate also held steady in February at 2.5%, which was the softest pace since March 2021.
• The Mortgage Bankers Association of America (MBA) said the rate on a 30-year fixed-rate mortgage increased to 6.43% over the week ended March 20, which is the highest level since October 2025.
  • Mortgage rates in the U.S. have increased dramatically over the past few weeks as higher energy prices are raising concerns about inflation.

Global

• Several critical central banks around the world made interest rate decisions in March, noting the outlook for their economies is clouded in response to geopolitical tensions in the Middle East.
  • These include: Bank of Canada, U.S. Federal Reserve Board, European Central Bank, Bank of England, and Bank of Japan – all of which held their key interest rates steady.
• The conflict in the Middle East has persisted with strikes continuing and the Strait of Hormuz remaining effectively closed.
• In March, The U.S. proposed a 15-point plan to Iran to reach an agreement on a ceasefire, but it was rejected by Iran. Iran, meanwhile, provided conditions that must be met for a ceasefire to be discussed. Those conditions included it taking authority over the Strait of Hormuz.

Notes From our Firm

• While global tensions, inflation, and geopolitical issues continue to drive volatility and headlines, trying to time the market during periods like this often leads to missing the strongest recovery days.
• To illustrate the benefit of staying invested, we’ve included a PDF showing six hypothetical investment outcomes in the S&P 500 Total Return Index (CAD) over the past 20 years.
• The data shows that missing even a few of these recovery days can significantly reduce long-term returns.

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