Copper Prices Plunge as Rate Hike Odds Soar Past 85%

Copper prices have plummeted from record highs as fresh US inflation data has boosted bets on Federal Reserve rate hikes.

The metal's price per metric ton fell after a hotter-than-expected CPI print, which showed headline inflation rose 0.4% month-over-month and 3.4% year-over-year as of September 11.

As a result, the probability of a Federal Reserve rate hike at the September 15-16 FOMC meeting has surged to around 85-88%, according to market-implied pricing.

The stronger dollar that comes with higher interest rates makes dollar-denominated commodities more expensive for international buyers and raises borrowing costs for construction and manufacturing sectors, which consume a significant portion of global copper supply.