The speeches of senior Federal Reserve officials were hawkish, base metals fell more, and copper prices fell below $10,000

Wall Street Sights

2024-05-09 03:37Posted on the official account of Shanghai Wall Street

In the early morning of May 8, Beijing time, 2026 FOMC member and Minneapolis Fed President Neel Kashkari said in an interview with the media that interest rates are likely to remain at their current levels for a "longer period of time".

Kashkari's hawkish rhetoric led to a cooling of market expectations for a U.S. interest rate cut. As a result, the US dollar strengthened for the third day in a row, while copper and other base metal prices fell in response. As of 3:15 p.m. local time, copper on the London Exchange fell 1.4% to $9,891 a tonne; Aluminum prices fell 1.5%; Zinc prices fell 3%.

Previously, the prospect of Fed easing and the copper supply gap jointly supported copper prices. At one point, copper prices soared above $10,000 a tonne on Tuesday as investors expected the Federal Reserve to start cutting interest rates this year. At the same time, market bulls are predicting further increases in copper prices, which have risen more than 15% so far in 2024, as the market fears a widening supply gap and global mining supply struggles to keep up with the growing demand in the new energy sector.

Goldman Sachs raised its year-end copper price target to $12,000/t from $10,000/mt, and raised its full-year average price forecast to $9,800/t from $9,200/mt, maintaining its forecast of an average of $15,000/t in 2025. Goldman Sachs analysts wrote in a note: "We forecast persistent and growing supply shortages in the metals market from 2024 onwards. Inventories are likely to be extremely low by the fourth quarter. ”

In the US, swaps markets are now pricing in a 54% chance of a Fed rate cut by the end of the year, up from about 40% at the end of April.

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