The Bank of Canada cuts interest rates by 25 basis points as inflation cools. The bank cited cooling inflation pressures and economic growth in line with previous projections. Crypto enthusiasts are keen on the markets as Bitcoin bulls look ahead for positive macroeconomic factors.
Bank of Canada Cuts Interest Rates
The Bank of Canada announced interest rate cuts on the heels of slowing inflation. In a Sept 4 release, the Bank announced its third consecutive rate cuts in line with policy projections. The move takes the policy rate to 4.25% signaling options for more cuts in the favorable factors.
“With continued easing in broad inflationary pressures, the Governing Council decided to reduce the policy interest rate by a further 25 basis points. Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation.”
The bank added that monetary decisions will be made based on emerging information and implications for inflation outlook. The inflation target remains at 2% with Governor Tiff Macklem stating that the policymakers will guard against the risk of a weak economy resulting in a rapid drop. Overall, the Bank of Canada noted that the economy grew in Q2 2024 due to government spending and investment business. Generally, macro factors remain under control with the global economy and key trading partners recording upticks.
What’s Next For Bitcoin?
The crypto market is down with most assets looking trading lower as investor sentiments plunge. Bitcoin price trades below $58k in a week that has seen outflows from the wider market. While crypto enthusiasts remain optimistic about a turn of events, commentators point to possible bullish signs like rate cuts and clearer regulations.
The United States also awaits potential rate cuts amid cooling inflation. Citi analysts project the Federal Reserve to slash interest rates at the upcoming meeting. Rate cuts will spark inflows into Bitcoin and crypto assets as investors will fund risky assets. The move will also be pivotal to the turnaround in present market sentiments.
David Pokima
David is a finance news contributor with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has an eye for breaking news. Staying updated with trends, David reported in several niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David goes cycling and horse riding.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
