Slowing global growth would argue for falling commodity prices. That is also what we are seeing for industrial metals such as copper.
Slowing global growth combined with extreme weather and inventory situations have created a more mixed situation for agricultural commodities. The agriculture price index has been moving sideways, with some components (such as orange juice, cocoa, and sugar) going up and others (such as soybean, corn, and coffee) going down.
For energy, slowing global growth and rising US production would argue for lower oil prices. But OPEC+ production cuts have pushed oil prices higher in recent months.
The sideways movement in the broad commodity price index is likely a welcome development for the Fed. However, a continued rise in oil prices could magnify the ongoing slowdown in growth and reverse the ongoing decline in inflation.
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