This morning in metals news, the Federal Reserve on Wednesday opted to maintain the federal fund interest rate at 0-0.25%, the Producer Price Index for final demand rose 0.4% in May and Chinese rebar futures fell Thursday.
Despite some easing, Fed notes economic challenges remain
In a statement Wednesday, the Federal Reserve said it would maintain its federal funds interest rate at 0-0.25%.
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“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Fed said. “In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
The Fed added it would continue its efforts to realize “smooth market functioning.”
“To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions,” the Fed said. “In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor developments and is prepared to adjust its plans as appropriate.”
Final demand index down 0.4%
The Bureau of Labor Statistics reported the Producer Price Index for final demand rose 0.4% in May.
“The index for final demand goods rose 1.6 percent in May, the largest increase since the index began in November 2009,” the Bureau reported. “Nearly two-thirds of the advance can be traced to prices for final demand foods, which increased 6.0 percent. The index for final demand energy climbed 4.5 percent, while prices for goods less foods and energy were unchanged.”
SHFE rebar price falls
Prices of rebar on the Shanghai Futures Exchange fell Thursday based on worries that weather conditions could disrupt construction activity in the country, Reuters reported.
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The most-traded rebar contract on the SHFE fell 0.2% to 3,596 yuan ($509.22) per metric ton, according to Reuters.