- Wednesday, October 16, 2024
Producers of metals and other raw materials have experienced a decline, falling into negative territory for the year to date. This downward trend was sparked by the release of minutes from the central bank's recent meeting, which has sown doubt regarding the timing of rate cuts.
The SPDR Select Sector Materials exchange-traded fund, which closely follows the materials industry group of the S&P 500, is now down 0.5% for the year 2024. This decline comes after the fund achieved record highs in 2023.
During the Federal Reserve's December meeting, the minutes indicated that most members believed the rate-increase cycle that commenced in 2022 had been concluded. However, they also indicated their intention to maintain a restrictive policy for the foreseeable future.
Chief Global Strategist at brokerage LPL Financial, Quincy Krosby, noted in a client communication, "The Fed minutes suggest that many members endorsed the 'higher rates for longer' narrative while those who projected rate cuts in 2024 envision them taking place later in the year."
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