statistics Canada they'll be reporting Canada's August inflation numbers tomorrow and according to Reuters there's a group of economists that are expecting the inflation rate could drop as low as 2.1% for the month of August that would be its lowest point since March of 2021 if that is accurate that's a pretty significant drop from the 2 and a half% rate that we saw in July the biggest reason for this projected cooling is the drop in in gas prices but even with that we're seeing core inflation measures also expected to decline now the Bank of Canada is been cutting rates uh pretty Sly now in response to the falling inflation it's lowered its key rate by a quarter point earlier this month to 4.25 again the third cut in a row there now Governor Tiff mckam he said that further Cuts could be on the agenda if inflation slows faster than expected here's what he had to say on the topic good morning Governor I'm wondering if anybody around the table uh argued for a half Point rate cut or whether that was something that you debated there was a strong consensus for a 25 basis point uh reduction in our policy rate as I highlighted in the opening statement this is our third consecutive policy rate if the economy was significantly weaker if inflationary pressures uh if the downward pressure on inflation was if inflation was significantly weaker than we expected yes it it could be appropriate to take a bigger step something bigger than 25 basis points he doesn't explicitly say 50 basis points but he says more than 25 that would sort of imply a 50 point drop possibly he does point out that he would consider this if the economy looks like it was in trouble now beo Chief Economist Douglas Porter he's predicting that the central bank will continue these quarter point Cuts until mid 2025 potentially dropping rates then to 2.5% on this topic he said there is a case to be made that if the economy were to weaken further there's little reason for the bank to keep rates in the neutral zone still though we're battling with those High shelter costs this factors in high rent it includes the mortgage payments that we've seen so much higher than we saw just a few years ago that remains the biggest factor in keeping inflation above that 2% % Target the Federal Reserve is setting up to announce its first interest rate cut in four years on Wednesday this week the goal there obviously is to ease High boring costs and cool inflation the big question this time around is whether they will opt for a smaller 25 basis point cut or whether they're going to go for 50 basis points a lot of people are calling for that as well as of this morning the odds are just over 60% that the cut will be 50 basis points with around 40% predicting a 25 basis point cut in most camps here people are feeling that any cut would be a positive step but it doesn't mean that there will be this immediate relief for most Americans regardless of the size of the cut any effects are really predicted to be pretty gradual Greg McBride he's from bankrate.com and he says what borrowers can be optimistic about is that we will see a series of rate cuts that cumulatively will have a meaningful impact on borrowing costs but it will take time now either 25 50 basis points it's not going to dramatically lower any cost right away interest rates which are now in that range of 5.25% to 5 .5% they are predicted not to drop below 4% until mid 2025 when we think of credit card holders these in particular McBride says won't see any immediate relief he says the FED has to do a lot of rate cutting just to get to 19% and that's still quite a bit higher than we were just a few years ago meanwhile if we think of mortgages auto loan rates we may see some modest improvements there but at least immediately that's not going to have a material effect on buying a house or paying off any significant debts one thing we have to consider though as far as the federal rate is considered are the political ramifications the presidential election that's just around the corner coming up early November a bigger rate cut there could lead to these accusations of political interference and even though the FED operates independently from the government even this perception of influence could take even a bigger role than they'd like between now and November so we know that interest rates will be going down it's just a matter of how much with this as a backdrop rate sensitive Harvest ETFs they hit 52- we highs in August further rate Cuts could continue to benefit this lineup I would like to mention three funds that would benefit from this first off the Harvest equal weight Global utilities ETF the ticker is HL utilities probably will benefit from rate Cuts that's due to the lower borrowing cost that they'll be faced that brings in higher profitability the potential for dividend growth also the Harvest Global Reit leaders income ETF hgr REITs are highly sensitive to race because they often carry large debt the lower rates reduce the boring cost they make real estate Investments more attractive compared with fixed income and thirdly here the Harvest US Bank leaders income ETF hubl in this type of company the lower rates can compress those net interest margins that can stimulate borrowing and economic activity that benefits Banks through increased loan growth and through financial transactions you can learn more at Harvest ETFs I will put a link for each of these funds in the description of this video it's a head-to-head battle this week on the poll question is government intervention in labor disputes like Air Canada's Justified we have a really really close vote so far you can weigh in with your thoughts visit our website to cast your vote again I'll put a link in the description of the video both good news and bad news from the aviation sector this week first off the good news Air Canada they have reached a tentative agreement with the Union that represents about 5200 pilots and that will avoid a strike which would have begun this week in just a few days uh before a potential disruption there that will obviously come as a huge relief for passengers it'll keep flights running while the union members vote on the deal uh the deal does follow a year of negotiations where the pay was the key sticking point there the airline pilots Association Alpa they had argued that Air Canada despite its record profits that they've been seeing was offering below Market compensation the union noted that about 25% of the pilots were actually taking second jobs 80% of those out of necessity now in response to that Air Canada offered a 30% salary increase over 4 years though the union initially found this insufficient the tentative fouryear deal that if ratified will add about $ 1.9 billion in value for the pilots it will also address key issues like compensation retirement and work rules now Alpa chair Charlene hudy she says the consistent engagement and unified determination of our Pilots have been the Catalyst for achieving this contract so with this tentative deal in place here for the time being at least Air Canada and Air Canada Rouge they will continue their normal operations key here if you are a customer who has changed flights due to potential strike you can revert those to the original booking in the airline said there will be no cost for that um on that note the deal did avert major disruptions there's about 670 daily flights over 110,000 passengers that fly every day so we have good news there and lastly here union members are expected to vote on the deal in the next month a pending approval by Air Canada's board staying in aviation but with the not so good part of things it isn't good news at Boeing factory workers there they are now on strike after they overwhelmingly rejected a proposed labor contract the strike began at midnight on Friday it's hitting production at Boeing's key manufacturing hubs in Seattle and Oregon now workers voted 96% in favor of a strike and then they rejected the proposed deal by 94.6% the main concerns there they have dissatisfaction with wage increases and cost of living adjustments the tentative deal that was offered it offered a 25% wage increase over a 4-year time period along with Healthcare and retirement benefit improvements but the union had pushed for a 40% raise they argue that the deal on the table didn't address the rising cost of inflation I am District 751 President John hold and he accused Boeing of using unfair labor practices he called for fairer negotiations Boeing's CFO Brian West he said he was disappointed over the strike warned it could delay airplane deliveries and disrupt production he said there was a disconnect and he says that Boeing is eager to negotiate a deal that works for everyone he also added that Boeing's immediate Focus would be on conserving cash as this strike unfolds another potential problem for Boeing is the fact that Credit Agencies have warned that a prolonged strike could lead to credit downgrades lastly on this story but not insignificant this strike is obviously a huge blow uh to Boeing's new CEO Cali ortberg he just became president and CEO on August 8th this year he had urged workers to avoid a strike and he warned that it could hurt the company's recovering uh but you can see how much impact that had on the workforce not much obviously there the company's production issues including supply shortages and Manufacturing flaws had already had an impact on deliveries as an example Southwest Airlines has already lowered its expectations for new Boeing planes for the balance of this year don't forget to vote on this week's poll question tomorrow we have the inflation numbers coming out for Canada and on Wednesday the US rate decision I will be back with that news as always thank you so much for watching we'll see you in the next video