Zinc prices surged overnight as Glencore cut output. Federal Reserve governors are still averse to raising interest rates over inflation fears.
Glencore Cut Causes Zinc Price Spike
Glencore PLC said on Friday it will cut 500,000 metric tons of zinc production, or around 4% of global supply, in its latest move to withstand weak commodities prices.
Zinc prices have fallen 30% since May to 5-year lows. They rallied 12% on the news, which follows recent cuts in copper output and could signal metal prices are nearing the bottom of this bearish cycle, analysts told Reuters.
Inflation Fears Kept Fed From Increasing Interest Rates
Federal Reserve officials held off on raising short-term interest rates at their September policy meeting because of worries that inflation could remain stuck at exceptionally low levels, according to minutes released Thursday.
The Wall Street Journal reported that the Fed has 2 goals of a robust labor market and low, stable inflation and policy makers concluded at the meeting that they were near their goal of “full employment,” but they weren’t convinced inflation is on its way back to their 2% target after undershooting it for more than 3 years.