Lower Commodity Prices Signal Easing of Inflation for Some
Washington, DC, July 6, 2022-A slide in raw-materials prices is building hopes that inflationary pressure might be starting to ease, reports The Wall Street Journal (WSJ).
Natural-gas prices, which had shot up more than 60%, closed the quarter 3.9% lower, with U.S. crude dropping from more than $120 a barrel to around $106 by the quarter’s end and below $100 yesterday. The price of cotton decreased more than a third since early May to close this quarter, and benchmark prices for copper and lumber - which factor heavily in the homebuilding market - dropped 22% and 31%, respectively, WSJ reports.
Many raw-materials prices remain historically high, WSJ notes. Still, “some investors are starting to view the reversals as a sign that the Federal Reserve’s efforts to slow the economy are reducing demand,” a WSJ article states. However, it continues, “traders and analysts say that some of the decline in commodity prices can be traced to the retreat of investors who piled into markets for fuel, metals and crops to hedge against inflation.”