Before every recession within the last 30 years, copper has tipped into a bear market. Well, it just happened again, and experts believe that it could indicate that another economic downturn is underway. Fed Chairman Jerome Powell recently said the Fed’s commitment to fighting inflation is “unconditional,” telling Congress that U.S. economic conditions are “very far” from the central bank’s targets. While the Fed plans to get more aggressive with interest rate hikes, many experts think we should be preparing for much higher rates to come. In a series of recent tweets, billionaire investor Bill Ackman said that he thinks rates would top 5% or more over the next year.

 

Business Insider/Zahra Tayeb
A key economic bellwether just fell into a bear market — and it’s happened before every recession in the last 30 years

Copper has just tipped into a bear market and it’s happened before each recession in the last 30 years, which could indicate another economic downturn may be underway.

It’s used in everything from electrics and electronics to construction, meaning it’s intertwined with the underlying global economy. The benchmark London Metal Exchange copper price has now fallen 24% from its peak above $10,700 a tonne in May 2021 Friday to trade at $8,255 a ton. A fall of more than 20% from a previous peak is the technical definition of a bear market.

Recessionary fears have picked up speed, fueled by rapidly rising interest rates and red-hot inflation, with some of the world’s biggest banks including Goldman Sachs, Morgan Stanley, and Citi increasing their expectations of a recession hitting the US economy, as the cost of food, fuel and housing continue to squeeze the consumer.

Continue reading, here.

 

Yahoo Finance/Brian Cheung
Powell’s ‘unconditional’ inflation battle raises recession alarms on Wall Street

Federal Reserve Chairman Jerome Powell is doubling down on his commitment to tame inflation, telling Congress that U.S. economic conditions are “very far” from the central bank’s targets.

“It’s unconditional, our commitment,” Powell told the House Financial Services Committee on Thursday.

Powell’s remarks suggest the Fed is willing to tolerate a slowdown in the economy if that’s what it takes to lower the pace of inflation.

Analysts at Evercore ISI wrote Thursday that Powell’s use of the word “unconditional” is significant.

Keep reading, here.

 

Kitco News/Anna Golubova
What’s gold price outlook as markets shift from inflation to recession fears?

Gold’s volatility has been relatively low compared to other assets as the precious metal retains its “mild bull market” status and trades comfortably between $1,800-$1,900 an ounce. But don’t expect a gold price rally until some confidence returns to the marketplace, according to MKS PAMP.

There is a shift in the market as inflation fears give way to recession panic, with equity investors opting out for cash over safe havens like gold, said MKS PAMP metals strategist Nicky Shiels.

You can read the full article, here.

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