The Bank of Canada goes first on Wednesday, with the rate decision, policy statement, and a new Monetary Policy Report released together at 9:45am ET, alongside Governor Macklem’s prepared remarks. Macklem and Senior Deputy Governor Rogers then hold the press conference at 10:30am ET, with the presser often running 45 minutes or more once Q&A begins. The sequencing matters, as markets tend to focus on the full “package”, the statement, updated projections, and Macklem’s tone, rather than the rate decision alone when a hold is the base case.
Later, the Fed releases its statement at 2:00pm ET, followed by Chair Powell’s presser at 2:30pm ET. With no Summary of Economic Projections at this meeting, guidance will come almost entirely from the statement and Powell’s answers. Policy expectations are fairly subdued, but the meeting draws added attention given Powell’s term ends May 15, making this presser potentially his last. That elevates the Q&A, with Powell likely facing questions around timing, transition, and whether he plans to remain on the Board once a successor is named.
BoC: Markets to watch Macklem on policy cues
Investor attention is firmly fixed on today’s Bank of Canada meeting. While the Governing Council is widely expected to leave the overnight rate unchanged at 2.25%, markets remain highly sensitive to the central bank’s underlying message. As has been the case over recent meetings, the policy statement will matter far more than the rate decision itself.
Macklem has been increasingly clear that the bigger risk may no longer be doing too much, but doing too little. Medium‑term inflation expectations are now sitting at the upper end of the Bank’s target range, and that’s clearly getting attention in Ottawa. One small but telling shift in the last meeting, was the removal of language describing the current policy stance as “appropriate.” It’s a subtle change, but one that creates space for the idea that rates may need to move higher if progress on inflation begins to stall.
There’s also a strong sense the Bank is keen to avoid repeating past mistakes. Waiting too long to tighten last time left policymakers scrambling, ultimately forcing a rapid and painful 475‑basis‑point hiking cycle. Against that backdrop, nudging rates higher earlier would preserve flexibility later, particularly if inflation proves stickier than expected. That’s not to say a hike is imminent, but if policymakers judge inflation risks as becoming more immediate, a 25‑basis‑point move framed as risk management wouldn’t be about slamming the brakes. Even signaling in that direction would likely prompt a near‑term repricing, though the actual decision may still be pushed out until later in the summer.
Wednesday’s BoC messaging, combined with the Fed decision and February GDP prints on Thursday, should help sharpen the market’s view on the economic outlook and the Canadian dollar’s next move. If Macklem strikes a firmer tone while the US dollar remains supported, the loonie could find itself pulled back toward the 1.36 area.
That said, the broader backdrop remains fragile. Ceasefire holding, but oil not flowing, a crowded global central bank and macro calendar, and lingering growth concerns argue against any clean, one‑way move. If growth anxieties resurface, the Canadian dollar may struggle to gain traction and could remain anchored closer to 1.37, at least until the macro picture becomes clearer.
Fed: ‘Should I stay or should I go’?
The Fed heads into today’s meeting with the hurdle for a genuine “surprise” set high. We get the statement at 2:00pm ET and Powell’s presser at 2:30pm ET, but without a fresh set of projections this becomes a communication meeting by default: markets will lean heavily on the phrasing in the statement and the way Powell frames the reaction function in Q&A.
On policy, a hold in the 3.50%–3.75% range remains the clean base case, but the macro backdrop is still noisy. The growth–inflation trade-off isn’t resolving neatly, and energy volatility is muddying the near-term inflation signal. That’s exactly the kind of environment where the Fed tries to preserve flexibility, staying data-dependent without letting financial conditions ease on assumption rather than evidence. Holding pattern for now, while the risks sit in the messaging.
Where it gets more interesting, uncomfortably so, is the human side of the institution. Powell’s chair term ends May 15, and the question about whether he stays on (as chair until a successor is confirmed, and potentially as a governor beyond that) has gone from hypothetical to central. The transition timeline has been messy, with Kevin Warsh’s nomination moving through the Senate process against the backdrop of the now-winding-down investigation tied to the Fed’s HQ renovation, and the politics of the handoff has been unavoidable, particularly with Senator Tillis playing a key role in how quickly the nomination advances. That’s why Wednesday’s Q&A could carry more weight than usual: if Powell signals he’s inclined to remain for “institutional continuity,” markets will read that as a guardrail; if he signals he’s ready to clear the stage quickly, markets will read that as an invitation for a faster reset in style, if not in policy.
As for Warsh, the messaging so far looks like what you’d expect from someone positioning for confirmation: independence as the headline, credibility as the constraint, and a push to keep the institution focused tightly on its mandate. The practical challenge, as always, is not the mandate itself, it’s deciding in real time which side of it is blinking first as inflation prints bounce and the labour market remains weak.
Putting that together, the most plausible communication outcome today is a Powell that sounds steady-to-hawkish: not closing the door on cuts if inflation cools or the labour market cracks, but not validating an easing path in advance either, especially with uncertainty still doing a lot of the driving, meaning we’ll see your traditional holding pattern messaging.
Against that backdrop, the dollar can stay supported for fairly simple reasons: a slightly more hawkish repricing in US rates tends to do the heavy lifting on the front end, and energy can do the rest. With the Middle East ceasefire narrative still the market’s “best case,” you can still end up with a firmer USD if crude stays elevated, especially in the scenario where the truce holds, but physical flows don’t really normalize and the conflict premium doesn’t fully come out.
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
