Foto: Observerdesk.com
By Isaac Cohen*
The Federal Reserve recognized, last week, that US economic activity has strengthened, given progress on vaccinations and strong fiscal and monetary policy support. It also recognized that “the path of the economy will depend significantly on the course of the virus” and confirmed that “inflation has risen, largely reflecting transitory factors.” https://www.federalreserve.gov/newsevents/pressreleases/monetary20210616a.htm
Evidence of these “transitory factors” can be found in the markets of several raw materials and commodities, which recently showed spectacular price increases, feeding concern about potential inflationary pressures. One of the best examples was lumber futures, which plunged 45 percent, from over $1600 per thousand feet in early May, to around $1000 by mid-June. Other examples were the prices of several commodities, such as copper, the bellwether of metals, which in May fell 4 percent to $9,553.50, from the highest price ever reached of $10,556 per metric ton. The same happened last week with other commodities traded at the London Metal Exchange. Nickel was down 4.4 percent, while aluminum and zinc both fell 1.2 percent. To explain the fall in the prices of these metals, there is speculation that the State Reserve Bureau of China soon will start releasing some of its stockpiles (The Wall Street Journal 06/16/21).
True, other product prices have increased spectacularly since last year, such as used cars (almost 30 percent) and airline fares (almost 25 percent). But these increases are impressive because they are compared to the deep price falls registered during the pandemic.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
