2025.12.1214:09:59UTC+00Lumber Lifted by Dovish Fed

Lumber futures have surpassed $550 per thousand board feet, driven by a more accommodative stance from the Federal Reserve, which has improved the demand outlook for construction materials. The Fed's anticipated 25 basis point rate cut, coupled with Chair Powell's dovish commentary, has prompted traders to anticipate further easing in the coming year. This is expected to exert downward pressure on mortgage rates, thereby boosting homebuilding and renovation activities. These interest rate movements have increased incentives for builders and distributors to replenish their inventories. However, ongoing tariff and trade tensions have limited supply. Although Canadian log exports have decreased this year, shipments to the US have experienced an uptick. Simultaneously, Canadian manufacturing output has fallen, and US lumber exports have declined. This combination results in reduced millfeed availability, forcing buyers to compete for the remaining supplies. Smaller regional distributors are feeling the strain, as recent bankruptcy filings and margin pressures have decreased throughput and exacerbated local shortages.