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Copper hits two-year high as base metals rise on fund buying
Copper prices hit their highest in almost two years on Friday while other base metals delivered strong growth as investment funds continued a buying spree driven by supply concerns. Three-month copper on the London Metal Exchange (LME) rose 1% to $9,834 a metric ton by 0953 GMT after touching $9,843 for its highest since April 29, 2022. The metal used in power and construction is up 16% over the past two months. “The major themes remain the same. April has seen broad money inflows into the commodity space,” said Alastair Munro, senior base metals strategist at broker Marex. A Citi note said the bank’s base case ... (full story)
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video The U.S. economy made substantial progress in 2023 on the Federal Reserve’s dual mandate of maximizing employment and stabilizing prices. Inflation had one of the largest drops in the last 50 years and did so with solid growth, low unemployment, and no recession. So far in 2024, that progress on inflation has stalled. You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed. I am still hopeful that we will again see a return to improvement on inflation in the months ahead, as our restrictive monetary policy continues to curb inflation pressures and the economy continues returning to pre-pandemic norms. At the end of the day, we will get inflation back to target. I always say that the first rule for data dogs is that when you are uncertain, keep sniffing. Right now, it makes sense to wait and get more clarity before moving. We were at our 2 percent target before Covid, but not because inflation of everything was 2 percent.. Housing was around 3.5 percent, services 2.5 percent, and goods –1 percent. Much of the improvement in inflation last year came from positive supply developments. As the supply chains healed, goods inflation returned basically back to pre-Covid rates. Most of that supply healing is now complete. Part of the supply side benefit last year came from increases in labor supply, in part from immigration and in part from higher participation rates of many groups. The impact of that will likely continue to help the economy this year. While we saw deterioration in services inflation last month, there was surprising improvement over the course of 2023—it remains above pre-Covid trends, but there may be more space for progress. That leaves the main short-run problem as I see it, which is persistently high housing inflation—still much higher than it was pre-pandemic. Looking at market data on rents for new leases, I’d say housing inflation is supposed to have been falling. If it doesn’t, it will be hard to see a smooth path back to our 2 percent inflation goal. As we have seen strong gross domestic product (GDP) and jobs numbers, we need to determine if this is a sign of overheating driving up inflation. But let’s be careful: As I have said before, when there are supply side developments (for example, higher productivity growth, supply chain improvements, or increasing labor force participation or population growth), aggregate numbers are not great measures of overheating. There are crosscurrents at work. Not all the data s post: Goolsbee: Proper Fed Policy Going Forward Will Depend on the Data Goolsbee: Fed’s Current Restrictive MonPol ‘Appropriate’ Goolsbee: ‘Makes Sense to Wait’ to Get More Clarity Before Moving Fed’s Goolsbee Says Progress on US Inflation Has Stalled post: Goolsbee: Still Hopeful for Return to Improvement on Inflation in Months Ahead Goolsbee: Persistently High Housing Inflation’s Main Short-Run Problem Fed’s Goolsbee: We Have to Recalibrate, We Have to Wait and See post: ? GOOLSBEE: THE GOLDEN PATH IS MORE DIFFICULT FOR 2024 ? GOOLSBEE SAY REAL FED FUNDS RATE IS HISTORICALLY QUITE HIGH ? GOOLSBEE: THE POLICY TRADEOFFS ARE HARDER THIS YEAR post: Fed's Goolsbee: Unproductive Speculating On Conditions For Raising, Or Cutting, Rates - Determining Policy Restrictiveness Depends On The Data
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- Posted: Apr 19, 2024 10:44am
- Submitted by:Category: Fundamental AnalysisComments: 0 / Views: 137