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“But the Fed left language in (its economic statement) to remind people they are looking at longer term inflation.”

Metals and energy prices climbed Wednesday as the Federal Reserve’s half-point interest rate cut lifted expectations for economic growth.

The commodities markets saw a vigorous advance in crude oil, gold and industrial metals prices as investors took the U.S. central bank’s rate reduction as a sign the Fed will be vigilant in trying to stave off a recession. The Fed on Tuesday slashed its benchmark federal funds rate to 4.75 percent from 5.25 percent, where it rested for more than a year.

Investors appeared optimistic that the Fed’s move would begin to unwind tightness in the credit markets and bring greater stability to financial markets, which have been periodically mired by rising defaults on subprime mortgages and housing market weakness. The commodities markets which had also felt the sting of uncertainty about how those problems would affect economic growth turned sharply higher Tuesday. Read more