The Fed is getting credit, in an indirect sort of way, for the sharp drop in commodity prices in the last few trading sessions. Analysts are telling me they think the wide range of actions the Fed has taken in response to the credit crisis will help contain the problem without much more in the way of interest rate cuts. That helps curb the inflation--hedge rush to commodities. It is also good for the dollar, and a stronger dollar leads to lower commodity prices. They also point to the Fed statement indicating it sees a sluggish period ahead for economies world-wide. That would mean lower demand for commodities and, therefore, lower commodity prices.
But volatility, most say, will be the name of the game for the near term. So fasten your seatbelts.
