Copper prices continued to decline following yesterday’s market reaction to comments by Kevin Warsh, the newly appointed chair of the U.S. Federal Reserve (Fed). His remarks raised concerns among investors about the likelihood of interest rate hikes this year. Warsh repeatedly emphasized the Fed’s commitment to curbing inflation, prompting markets to price in potential rate increases as early as next month — a development that weighed on copper prices.
Broader Impact on Base Metals
This shift dampened the recent optimism across base metals, which had built up earlier this week after the U.S. and Iran agreed to sign a provisional peace deal. Analysts warn that a more hawkish Fed stance could potentially slow global economic growth and weaken demand for industrial metals.
On the London Metal Exchange (LME), copper has slipped below $13,700 per tonne. Similar downward pressure is emerging for aluminum, zinc, and other base metals.