The recent decline in inflationary pressures has sent producers of metals and other raw materials soaring. This significant development has been seen as a clear indication that the Federal Reserve's rate-hike cycle is coming to an end.
According to the latest data from the Labor Department, consumer prices remained unchanged last month, with a year-over-year increase of 3.2%. Although this represents a slower pace compared to September, it suggests that price gains are rapidly slowing down and approaching the Fed's 2% annual target.
In light of these findings, the central bank has refrained from raising rates during its last two meetings. However, prior to the release of the data on Tuesday, Wall Street strategists had differing opinions on the likelihood of further rate increases. One strategist noted that the positive aspect of the recent moderated price increases was the broad nature of the categories impacted. This suggests promising signs for future stability. Carl Riccadonna, Chief U.S. Economist at brokerage firm BNP Paribas, emphasized that the moderation in inflation was not solely limited to goods and shelter but extended to non-housing services as well.
Non-housing services have been a stubborn category for inflation and interest-rate expectations, as highlighted by Fed Chairman Jerome Powell in recent speeches. The decline in inflation and interest-rate expectations has resulted in roughly a 1.5% drop against a basket of rival currencies. As a result, gold futures, which are sensitive to changes in the value of the dollar, experienced their largest increase in a month.
In other industry news, Canadian miner Teck Resources has reached an agreement to sell its coal assets to a group led by mining and trading giant Glencore. This deal marks the end of a long saga and is expected to be one of this year's biggest transactions in the mining sector.