Fed officials downplay rate cuts

Gold pulled back slightly overnight as Fed officials downplayed rate cuts but remains poised for weekly gains.

By Nadia Elbilassy | @Nadia Elbilassy | 17 May 2024

Market open
  • China Data: Mixed impact with retail sales missing expectations (2.3% vs. 3.7%) but industrial production exceeded forecasts (6.7% vs. 5.5%).

  • Asian Stocks: Fell as Fed officials' warnings led investors to reassess interest rate cut expectations.

  • Fed Stance: Officials stressed the need for more confidence before considering policy loosening.

Asian stocks

Asian stocks declined on Friday as investor expectations for interest rate cuts were reevaluated following warnings from several Federal Reserve officials.

Several Fed officials indicated that it was premature to anticipate interest rate cuts, stating that more confidence was needed before the central bank could consider loosening its policy.

Mixed economic data from China also weighed as Retail sales data missed expectations of 3.7% at 2.3%. Whilst industrial production came in better than expected at 6.7% vs 5.5% expected.


Spot gold stabilized at $2,388 an ounce after edging lower last night on officials being more cautious on interest rate cuts. The yellow metal had surged to nearly $2,400 an ounce earlier in the week following some soft U.S. economic data.


Oil prices were on track for a modestly positive week, driven by a softer dollar, shrinking U.S. inventories, and increased Chinese stimulus, which boosted hopes for improved demand.

However, crude markets faced mixed signals this week, highlighted by a major industry body lowering its demand forecast for the year.