The Start of the Rate Cut Cycle Will Lift Commodities

From Desjardins

At its June 5 meeting, the Bank of Canada kicked off its rate cut cycle, bringing its policy rate down from 5.0% to 4.75% (graph 1). The next day, the European Central Bank also officially started cutting rates. But it will be a while before the Federal Reserve joins them, as inflationary pressures in the United States—especially in the services sector—have proved particularly stubborn. As far as commodity prices are concerned, the US economy (and US rates) have the biggest impact.