The recent announcement by the Federal Reserve regarding its rate-cutting plans has had a notable impact on producers of metals and other raw materials. The central bank’s deliberate vagueness in its policy statement has resulted in a decline for this sector.
According to the Fed’s statement, there has been a shift towards better balancing the risks involved in achieving employment and inflation goals. Additionally, the central bank highlighted that changes to its economic outlook could trigger certain “adjustments” to the target range.
During a press conference, Fed Chairman Jerome Powell expressed that rate reduction was not expected until the rate-setting committee was confident that inflation was under control for an extended period. He further emphasized that this confidence is unlikely to be established by March.
The absence of the ‘dot plots’, which reflect the viewpoints of FOMC members on the rate cycle, has left financial markets solely reliant on the statement. This has resulted in discontent among investors over the uncertainty surrounding the timing of rate cuts. Quincy Krosby, chief global strategist at brokerage LPL Financial, noted in a client communication that the markets are displeased with this ambiguity.