Producers of metals and other raw materials experienced a decline in their stock values following the release of the Federal Reserve’s minutes from its July policy meeting. During the meeting, the central bank decided to raise its federal funds rate by a quarter-percentage-point, bringing it to a range of 5.25%-5.5%. This move marked the highest level in over 22 years.
Uncertainty Surrounding Inflation and Economic Downturn
The minutes from the Fed’s July meeting revealed that a majority of senior officials on the committee believed that further tightening of monetary policy might be necessary in order to combat inflation. These officials perceived “significant upside risks to inflation” and acknowledged the need to address this issue. However, some members expressed concerns about the potential impact on the economy, including fears of an economic downturn.
Bidding War for United States Steel
United States Steel has found itself at the center of a heated bidding war. Reuters reported that ArcelorMittal is considering making a bid for the steel maker. Currently, both Cleveland-Cliffs and privately held steel-service center Esmark have each offered $35 per share for U.S. Steel. The Cleveland-Cliffs bid includes a mixture of cash and stocks, while the Esmark bid is an all-cash offer.
Progress in Newmont’s Takeover of Newcrest
Newmont’s proposed takeover of Australia’s Newcrest is one step closer to completion, as it recently received clearance from the Korea Fair Trade Commission. The push to establish alternative supply chains for electric-vehicle batteries, bypassing China, has led Western miners to consider processing their metals in Africa. This recent development signifies a significant shift in their long-standing strategy.