When will the Federal Reserve begin to stop buying aluminum wire?
Posted October 01, 2018 07:04:38 The Federal Reserve is reportedly considering cutting the size of its $100 billion aluminum wire trade with Mexico, according to a report by the Financial Post.
The decision is “highly likely” according to sources, but there are other possibilities, the paper reports.
The paper also reports that the Fed may start to trim its aluminum trade with China, another major aluminum supplier, but that the move is unlikely to happen before the end of 2018.
The Federal Reserve has already cut its aluminum wire purchases from Mexico by more than a third over the past decade.
In November, the Federal Deposit Insurance Corp (FDIC) approved the purchase of $1.7 billion in aluminum wire from Mexico.
Mexico had agreed to pay $1 billion to cover the cost of the wire, which was cut by more that 50% due to a surge in the price of aluminum and other metals, including copper.
The wire was sold in bulk to the Federal Housing Finance Agency.
The FHFA also sold $3.3 billion in wire to the FDIC, which in turn sold it to the Treasury Department.
The FHSA’s decision is a major setback for the aluminum industry, which has been trying to secure a much-needed financial bailout from the federal government in the wake of the housing bubble.
The paper also says that Mexico may start selling aluminum wire to other buyers as early as 2018, with a total of $5 billion in sales.
It also says there are also talks between the Federal Energy Regulatory Commission and a Mexican company about selling aluminum to other countries.
The aluminum industry is worried that the Federal Open Market Committee (FOMC) will decide to keep the interest rate on its $85 billion $85.50-a-barrel bond program at its current rate, which would make it the first time since 2009 that it would not raise rates.
The central bank will have to act soon if it wants to keep its bond program open, and the aluminum trade has long been a major source of uncertainty in the market.
Mexico has long argued that it needs more money to pay for its energy needs, and has recently cut its tariffs in order to buy aluminum.