Since 1989, the Federal Reserve has initiated seven rate cutting cycles, including the current cycle that began in 2024. This analysis examines copper price performance across three time dimensions: around the first rate cut, during the cutting cycle, and around the final rate cut. Key findings reveal: ①Copper prices showed mixed performance during cutting cycles, with movements primarily determined by post-cut market expectations and copper's fundamental supply-demand dynamics. ②Copper performed relatively better under preventive rate cuts. ③Copper price trends after the final rate cut demonstrated greater consistency and predictability, as market economic expectations had undergone substantial shifts by cycle completion, enabling copper to more readily establish smooth trending movements.

**1. Federal Reserve Rate Cutting Cycle Overview**

Since 1989, including the current cycle initiated in 2024, the Federal Reserve has launched seven rate cutting cycles. Each cycle's macroeconomic background, cutting path, and subsequent impacts have been analyzed:

Based on these patterns, Fed rate cuts can be categorized into three types: preventive cuts, recession-driven cuts, and emergency cuts. These categories differ in triggers, paths, and outcomes: First, regarding economic conditions, "soft landing" expectations typically accompany preventive cuts, while recession pressures or risk event impacts accompany recession-driven or emergency cuts. Second, regarding cutting paths, preventive cycles tend to be shorter with relatively gradual cuts, while recession-driven and emergency cuts typically demonstrate continuity and rapidity.

**2. Copper Price Performance Review During Rate Cutting Cycles**

Given that the current cycle (initiated in 2024) remains incomplete, this analysis focuses on the previous six complete cycles, examining copper price performance across three time dimensions: around the first rate cut, during the cutting cycle, and around the final rate cut:

**(1) Copper Price Performance Around First Rate Cut**

Using the copper price in the month of the first rate cut as baseline, analysis of copper performance 12 months before and after the initial Fed rate cut reveals:

First, during the 4-8 months before the first rate cut, copper prices generally performed strongly; around 4 months before rate cuts, copper prices showed weakness and lacked upward momentum.

Second, during the 12 months following the first rate cut, copper performance varied by cut type: ①Under recession-driven cuts, copper prices faced significant pressure. ②Under emergency cuts, copper prices initially weakened then recovered. ③Under preventive cuts, copper showed no clear trend—prices remained under pressure for 12 months after the 1995 cycle began; copper trended upward following the 2024 Fed rate cut initiation; after the 2019 preventive cuts began, copper showed upward trends for 5 months before COVID-19's outbreak caused rapid decline, followed by recovery after the Fed's swift emergency cuts and quantitative easing implementation.

**(2) Copper Price Performance During Cutting Cycles**

Using the first rate cut as start point and final cut as end point, analysis of copper performance during Fed cutting cycles shows:

First, during cutting cycles, copper prices did not exhibit clear trending patterns, with mixed performance and varying rhythms. This may relate to frequently changing economic recovery expectations during cutting cycles, as markets trade different logics including liquidity easing, economic soft landing, and economic recession, leading to vastly different copper performance under different trading themes.

Second, from results perspective, copper prices generally performed weakly from first to final rate cut without significant gains, possibly due to incomplete recovery of real economy fundamentals and demand improvement during cutting cycles, with copper still constrained by weak economic expectations.

**(3) Copper Price Performance Around Final Rate Cut**

Using copper prices in the month of the final rate cut as baseline, analysis of performance 12 months before and after the final Fed rate cut reveals:

First, compared to the 12 months around first rate cuts and during cutting cycles, copper price patterns around final rate cuts showed greater regularity, relating to substantial shifts in economic expectations after Fed rate cutting completion.

Second, during the 12 months before final rate cuts, copper prices under emergency and preventive cutting scenarios showed continued weakness, while under recession-driven cuts, prices exhibited low-level consolidation before gradually stabilizing and rising near the final cut timing.

Third, during the 12 months after final rate cuts, each of the three cutting types witnessed one significant copper price rally. These rallies shared common drivers—the Fed had reduced the federal funds target rate to extremely low levels (1%, 0%, and 0% respectively), creating abundant market liquidity that activated copper's financial attributes. Additionally, markets entered recovery trading phases after cutting completion, enabling copper to benefit from financial and commodity attribute convergence, often achieving smooth unidirectional upward moves.

Fourth, during the 12 months after final rate cuts, excluding the three cycles with significant copper rallies mentioned above, the other three cycles concluded with federal funds target rates of 3%, 4.75%, and 5.25% respectively. Under these conditions, copper's financial attributes performed moderately, with price performance varying based on different supply-demand dynamics.

**3. Conclusions and Outlook**

This review reveals several key patterns:

First, Fed rate cutting operations do not directly determine copper price trends. During cutting cycles, copper prices show mixed performance, with movements fundamentally determined by post-cut market expectations and copper's supply-demand fundamentals.

Second, comparing copper performance under preventive, recession-driven, and emergency cuts shows that recession-driven cuts clearly pressured copper prices, emergency cuts led to initial weakness followed by recovery due to event-driven factors, while preventive cuts produced relatively better copper performance.

Third, comparing copper price trends observed across the three dimensions—around first cuts, during cutting cycles, and around final cuts—reveals that post-final-cut copper trends demonstrate greater consistency and predictability. This occurs because during cutting cycles, market trading directions and Fed rate decisions follow gradual, data-dependent approaches requiring close monitoring of employment, inflation, and other economic fundamentals to assess cutting effectiveness. Copper demand anchors to global economic growth expectations, making prices susceptible to macro-driven volatility when economic expectations shift. After cutting completion, market economic expectations undergo substantial transformation, enabling copper to more readily establish smooth trending movements.

Looking ahead, the current cutting cycle represents Fed "preventive" cuts addressing U.S. economic downturn and labor market deterioration risks. Focus should remain on cutting paths and overseas macro market trading logic changes. For copper, the most favorable macro combination would be "U.S. economy weak but not recessionary" plus "gradually improving rate cut expectations." If subsequent inflation and employment data further solidify market Fed cutting expectations, or if markets shift to recovery trading, copper price centers may rise further.