The Globe and Mail reports in its Thursday edition that after the CPI inflation slowed to 2.5 per cent in July, the Bank of Canada's rate cut announcement on Wednesday came as no surprise. The Globe's guest columnists Jeremy Kronick and Steve Ambler write that they expect at least one or possibly two more 25-basis-point cuts before the end of the year. This cut widened the gap between the BOC's overnight rate target and the top of the U.S. Federal Reserve's band for its equivalent, the federal funds rate, from 50 basis points at the end of May to 1.25 percentage points. Should this gap concern the BOC, potentially leading to a decision not to cut the overnight rate again even if it otherwise wants to? The guest columnists do not think so, and here is why. First, the Fed is now poised to start a rate-cutting cycle of its own. In a speech at Jackson Hole, Wyo., on Aug. 23, chairman Jerome Powell said, "The time has come for policy to adjust." Second, the consequences of a divergence between the two policy rates are not likely to be severe, and are likely less severe now than in the past. One possible danger of a widening spread between the two policy rates is the possibility of a depreciation of the loonie.