Fed's Rate Hold Keeps Aluminium Prices Elevated Amid Inflation Concerns

The US Federal Reserve held its benchmark federal funds rate at 3.50-3.75 per cent for the fourth consecutive meeting, in line with market expectations.

This decision reflects an ongoing concern about inflation, which remains above the Fed's target of 2 per cent, despite a slowdown from its peak in 2022.

The core Personal Consumption Expenditures (PCE) Price Index rose 3.3 per cent over the past 12 months through April, while energy prices have become increasingly difficult to ignore due to rising costs following the closure of the Strait of Hormuz.

For the aluminium industry, this decision signals a continued supportive backdrop for prices, driven by persistent inflation, elevated energy prices, geopolitical tensions, and tightening inventories.