Copper edges lower as US inflation boosts bets on Federal Reserve rate hikes

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Copper just went from record-breaker to retreat mode in a matter of days. After surging past $14,500 per metric ton on the London Metal Exchange earlier this month, the industrial metal is sliding as fresh US inflation data rewrites the script on Federal Reserve policy expectations. The culprit: a CPI print that came in hotter than Wall Street wanted. Headline inflation rose 0.4% month-over-month and 3.4% year-over-year as of September 11, while core CPI, which strips out food and energy, climbed 0.3% on the month. Rate hike odds surge past 85% Markets wasted no time recalibrating. The probability of a Federal Reserve rate hike at the September 15-16 FOMC meeting has jumped to roughly 85-88%, according to market-implied pricing. For copper, the math is straightforward but punishing. Higher interest rates strengthen the dollar, which makes dollar-denominated commodities more expensive for international buyers. They also raise borrowing costs for the construction and manufacturing sectors that consume the bulk of global copper supply. The dynamic has been a recurring theme throughout 2026. Persistent inflation, driven in large part by volatile energy prices, has kept the Fed in a haw...

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