Federal Reserve Eyeing September Rate Cut: How a Weaker Dollar Could Impact Commodity Prices

Federal Reserve Chair Jerome Powell has signaled a potential interest rate cut in September to support the job market. Learn how this decision, if made, could weaken the U.S. dollar and drive up prices for precious metals and industrial minerals.
FederalReserve JeromePowell RateCut InterestRates Economy Investing Commodities Gold Silver PreciousMetals MarketAnalysis Finance

 It is possible that Federal Reserve Chair Jerome Powell could announce an interest rate cut at the September 16-17, 2025 meeting. Recently, Powell signaled that while inflation remains somewhat elevated, rising risks to the job market may justify a reduction in interest rates to support economic growth and employment. Market expectations for a rate cut in September increased sharply following Powell's comments, with investors pricing in over a 90% likelihood of a quarter-point reduction. However, Powell emphasized that this decision will depend on upcoming job and inflation data, so it is not guaranteed but certainly on the table.

If rates are cut, this typically lowers borrowing costs, which can stimulate the economy. For commodity prices, especially precious metals and minerals, a rate cut often leads to higher prices because lower interest rates tend to weaken the U.S. dollar and increase inflation expectations. Precious metals like gold and silver are commonly seen as a hedge against inflation and currency weakness, so demand may rise. Industrial minerals may also see price increases if lower rates boost economic activity and demand for raw materials.

In summary, a possible September rate cut reflects concerns over a slowing labor market despite persistent inflation, and such a cut could lead to upward pressure on commodity prices, including precious metals and minerals, due to a weaker dollar and renewed economic optimism.

SP

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