After This Interest Rate Rise Commodities Rally After The Market Can Continue? - Aluminum coil,Aluminum Sheet,Aluminum Foil supplier & manufacturer

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After This Interest Rate Rise Commodities Rally After The Market Can Continue?

August 2, 2022 [email protected] Comments Off

Industry personage said, the Federal Reserve itself may not have thought, the rate increase added to the effect of the rate cut!  

On July 27th, the Federal Reserve raised its benchmark interest rate by another three-quarters of a percentage point.  It was the Fed’s fourth rate increase this year, and the second in a row since June by 75 basis points, bringing the cumulative increase to 225 basis points, raising the target range for the federal funds rate from 0-0.25 per cent to 2.25-2.5 per cent.  

In terms of both magnitude and speed, this would be the biggest increase in interest rates since the 1980s, and would have huge and profound consequences for the United States and the world.  

 

On June 15, after the federal reserve to raise interest rates 75 basis points, at that time, most of the items in the futures market reaction is dropped, including energy and soft commodities, non-ferrous, coal tar, steel ore and chemical trading futures varieties during the next two days in different levels fall, conform to the federal reserve to raise interest rates – dollar – the logic of commodity prices fall.  However, this logic was challenged in the futures market on July 28, when the Federal Reserve announced another 75 basis point interest rate hike, but the futures market on that day reacted in the opposite direction, with almost all major commodity categories rising, among which energy, coal coking steel ore, grease oil, building materials and non-ferrous metals were the biggest gainers.  At the same time, the dollar index can also be seen on the day of a relatively significant decline.