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On September 18th, arguably the biggest surprise in the Federal Reserves latest interest rate decision was the single dissenting vote. Despite unfavorable circumstances, Fed Chairman Powell managed to achieve a near-unanimous consensus at this weeks monetary policy meeting. Newly appointed Governor Milan was the only vote against the 25 basis point rate cut. Milan, a close ally of Trump, was sworn in as an interim Fed governor on Tuesday. His objection was based on support for a larger rate cut—something Trump has been demanding for months. However, Governors Waller and Bowman, who had voiced dovish dissent in July, did not do so again this time. KPMG Chief Economist Diane Swonk said, "Its clear that Powell has successfully herded the cats together."Meghan Robson, head of U.S. credit strategy at BNP Paribas: "Todays Fed decision suggests the Fed will prioritize growth over inflation and may allow the economy to "overheat" until the inflation path becomes clearer. We believe this policy approach should currently support credit spreads."Syrian President: Security agreement with Israel is a "necessary move" and Syrias airspace and territorial integrity should be respected.Syrian president: Security talks with Israel may produce results in the "coming days."Scott Kimball, chief investment officer of the fixed income team at Loop Asset Management: "The Feds 12-month inflation forecast is 2.6%, which shows that it is more tolerant of inflation and may no longer be its primary focus. Implementing a looser policy on the basis of fiscal stimulus should support lower-quality corporate credit spreads."

Copper price falls below $3.40 as recession fears intensify

Alina Haynes

Oct 25, 2022 15:28

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Copper prices fall below Monday's lows as fears of a US economic recession intensify. The base metal has broken to the downside from the consolidation formed in a narrow band of $3.41 to $3.44 and is aiming for further depreciation as rising interest rates challenge growth rate forecasts.

 

A Reuters poll predicts that the Federal Reserve (Fed) will raise interest rates by 75 basis points (bps) in the first week of November. Notably, the Federal Reserve is acting particularly actively to reduce the inflation rate. Consequently, policy-tightening measures have been consistently popular.

 

This has increased the likelihood of a future recession, as the growth rate has been significantly lowered and unemployment levels are anticipated to rise. Fears of a recession have bolstered US Treasury Chief Janet Yellen's statement that one "cannot rule out the likelihood" of a recession, as reported by MSNBC.

 

China's copper imports have increased by 25.6% during the past year. Amid the announcements of stimulus measures by the Chinese government to avoid the implications of the zero-tolerance Covid strategy and a real estate crash, infrastructure spending has increased. After the monsoon season in Asia, construction and real estate firms are known to recover throughout the winter months.

 

According to a report by ANZ Research, copper imports increased significantly as the forecast for demand in the power industry improved.

 

After the third continuation of XI Jinping's leadership in China, his policy pronouncements will continue to be crucial moving forward.

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