BMO Notes Very Rare Case of Bank of Canada Easing While Equities Surge

09:36 AM EST, 11/27/2025 (MT Newswires) -- Equities roared higher again heading into Thursday's United States Thanksgiving, fueled by Federal Reserve rate cut prospects and leaving recent concerns around valuations in the dust, said Bank of Montreal (BMO).

Canada wasn't left out, as the TSX punched above the 31,000 level for the first time and is up more than 20% from year-ago levels, and more than 50% in the past two years, noted the bank.

The rally in almost everything swept up gold, currencies and even crypto, pointed out BMO.

The bank has recently been making the case that while the TSX may not be a great representation of the Canadian economy, it does a good job of acting as a leading indicator for the economy.

A strengthening economy often eventually begets tighter monetary policy. Short-term rates do indeed tend to follow along with the equity market's performance, added BMO.

While stocks and rates have a complicated causal relationship, it's virtually unheard of in the past 25 years to have the Bank of Canada policy easing into the face of a roaring equity market, according to BMO.

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