Fed’s apparent “dovishness” cheers the markets

Commodities have benefited in the past week from a continued improvement in investor sentiment, helped by a relatively dovish statement from the US central bank which weakened the dollar further. However, we are a little wary. The new median forecast of FOMC participants implies that they only expect to raise interest rates twice this year, but the mean forecast is still consistent with up to three hikes. What’s more, either outcome would be a faster pace of tightening than currently priced into the markets.