Bank Of Canada Cuts Benchmark Overnight Rate, Bitcoin Remains Unaffected

According to CoinDesk, the Bank of Canada (BoC) has reduced its benchmark overnight rate by 25 basis points to 4.75%. This decision was largely expected by economists, as Canadian policymakers had previously expressed satisfaction with the current inflation trend, despite concerns over slowing economic growth. BoC Governor Tiff Macklem, in his post-decision remarks, stated that further cuts to the policy interest rate could be anticipated if inflation continues to decrease. The BoC is the first among the G-7 central banks to initiate what is expected to be a cycle of easier monetary policy, following years of efforts to curb inflation. It is anticipated that the European Central Bank will be the next major central bank to ease its policy in its upcoming meeting. Despite suggestions from some members of the U.S. Federal Reserve that the bank might refrain from any rate cuts throughout 2024, recent economic data has shown a slowdown in both economic growth and inflation. As per CME FedWatch, traders have currently priced in a nearly 60% chance of a rate cut either before or at the Fed's September meeting. Typically, tighter monetary policy can pose challenges for risk assets, including bitcoin, as higher rates increase competition for investor capital. However, with a cycle of lower interest rates seemingly on the horizon across Western economies, bitcoin's value remained relatively stable, trading at $70,500. This could potentially set the stage for bitcoin bulls to aim for the cryptocurrency's all-time high from March, which was above $73,500.