Copper Tumbles Amid Sharp Sell-Off In Equities On Hawkish Fed

3 Nov 2022 , 04:15 PM

Copper tumbles nearly 2.5% on Thursday amid sharp gains in benchmark US treasury yields that soared more than 3% dragging the dollar higher following hawkish remarks from Federal Reserve on interest rates. The dollar index extended gains to approach 113 on Thursday and is on track to move back to 20-year highs after the Fed said interest rates will be higher than previously expected. The Federal Reserve on Wednesday announced its widely expected decision to raise interest rates by another 75 basis points. Citing efforts to achieve maximum employment and inflation at the rate of 2 percent over the longer run, the Fed announced its decision to raise the target range for the federal funds rate to 3.75 to 4 percent. The Fed also said that ongoing increases in rates will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. Meanwhile, European stocks fell sharply on Thursday after the U.S. Federal Reserve fully reaffirmed its commitment to fight inflation and signaled it was very premature to think about pausing the tightening cycle. Sentiment was also dented after China affirmed that a zero-tolerance approach continues to be the overall strategy in tackling COVID-19. Powered by Commodity Insights