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Commodity traders eye big gains as Fed risks another recession – What’s next? [Video]

The most highly antipated FOMC Meeting of 2022 and quite possibly the most important monetary policy decision in Jerome Powell’s career took place last Wednesday with the Federal Reserve lifting interest rates for the first time in the pandemic era.

At the end of its two-day policy meeting, the Federal Open Market Committee increased its benchmark interest rate by a quarter of a percentage point and signalled further hikes at all six remaining meetings this year.

Looking back throughout the whole of 2021, Fed Chair Jerome Powell played down the biggest year-on-year rise in inflation seen in more than four decades – characterizing the record spike as “transitory”, which inevitability will always be remembered as the worst inflation call in the history of the Federal Reserve.

There's no denying it, that the Fed is caught in a box of its own making because it didn’t move quickly enough on raising rates last year. Now it has to be seen to move aggressively, which ultimately means, Stagflation is now a major risk to the economy in the second half of the year, or worst still a recession.

Historically, every Fed rate hike cycle over the last 70 years has pushed the economy into recession and traders are convinced that this time, it won't be any different.

Only time will tell, however one thing we do know for certain is that the U.S dollar and Equity markets tends to lose altitude once the Fed begins its tightening cycle. This inversely presents huge bullish tailwinds for the entire Commodities sector from the metals, energies to soft commodities – as they are viewed as one of the most reliable hedges against risk, inflation and economic shock.

Already within the first quarter of 2022 – a total 27 Commodities ranging from metals, energies to soft commodities have tallied up astronomical double to triple-digit gains and this is just the beginning!

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

Author

Phil Carr

Phil Carr

The Gold & Silver Club

Phil is the co-founder and Head of Trading at The Gold & Silver Club, an international Commodities Trading Firm specializing in Metals, Energies and Soft Commodities.

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