The recent comments from Federal Reserve Chairman Jerome Powell have resulted in a significant slide in the dollar, leading to a surge in the prices of metals and other raw materials. Fed officials are becoming more confident that they don’t need to continue raising interest rates to combat inflation. However, they have not explicitly promised an end to the rate-hike cycle, as reported by The Wall Street Journal.
Market experts believe that the markets’ strong belief in the Federal Reserve’s “dovish” pivot during its November 1 meeting will lead to a rate cutting cycle by mid-2024, if not earlier. Quincy Crosby, chief global strategist at brokerage LPG Financial, stated, “The current ‘higher for longer’ mantra has been countered by the markets’ profound conviction.”
There is positive news for the demand of construction materials, as construction spending saw its 10th consecutive monthly increase in October. This growth is mainly attributed to the construction work on commercial buildings and government-funded public projects.
It is an exciting time for producers of metals and other raw materials as the dollar continues to decline, and the construction industry experiences a boost in spending.