Key Highlights
- Policy announcements from the new US administration had a big impact on markets in the second quarter (Q2):
- US tariff threats shook stock markets, but markets recovered when tariffs were paused;
- The US government’s plans to cut taxes and increase spending led to a rise in longer-term interest rates.
- The Canadian economy grew slowly as tariffs began to hurt goods-related industries.
- Core inflation in Canada remained around 3%, above the Bank of Canada’s target of 2%.
- Equities rose over the quarter as investors hoped tariffs would be smaller than feared.
- Short-term bonds outperformed longer-dated bonds as yields rose on long bonds.
- Looking ahead, there is still a lot of uncertainty around how and when tariffs will be applied, and what their full impact will be.
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As always, if you have questions or want to review your portfolio, please contact your Encasa advisor.