Gold falls to one-week low after Fed dashes rate cut hopes

Gold falls to one-week low after Fed dashes rate cut hopes

On Tuesday, Mr. Trump called on the Fed to cut rates by 1 percentage point and to resume its crisis-era bond-buying program to stimulate growth. The Nasdaq composite gained 0.1 per cent.

The Fed's decision was unanimous, with all 10 members of the central bank's rate-setting committee voting in favor of holding its rate target steady.

On the other hand United States private demand grew at a sluggish pace in the first three months of the year, and soft inflation is continuing to puzzle Fed officials as above-trend growth and unemployment of just 3.8 per cent fail to push year-on-year price growth durably to the 2 per cent target.

Powell's commentary suggests that the Fed is not anywhere close to where policymakers saw the central bank in the middle of 2018, when the Fed raised rates four times to temper an economy that was also seeing a tighter labor market and an increase in wage growth.

"We don't think about short term political considerations, we don't discuss them and we don't consider them in making our decisions one way or the other", he said. For all the intense political pressure to ease policy and the mixed growth/inflation data, the US central bank held the line on Wednesday and refused to signal anything other than it was still on pause.

Gold fell about 0.5 percent in the previous session, its biggest one-day percentage decline since April 16, after the Fed's statement boosted the dollar and USA treasury yields.

Oil and metals markets added to the pressure on stocks on Thursday with traders sending copper to a 2-month low and using news of record US oil production to cash in some of Brent crude's near 33 percent rise this year.

There was a little bit more movement from sterling as the Bank of England's rate setters voted unanimously to keep rates on hold at 0.75 percent but stuck to the view that higher borrowing costs would be needed in future, a more hawkish stance than either the U.S. Federal Reserve or the European Central Bank. Moore, when he's not calling for the president to fire Powell (whom Trump named to the job less than two years ago) has been calling for steep cuts in interest rates.

The economy expanded at a 3.2 per cent annualized pace from January to March, boosted by exports and inventories growth.

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USA crude was last off 27 cents at $63.32 a barrel while Brent slipped 33 cents to $71.86. It said it will stop the runoff in September as the economy is slowing down.

Fed officials said their 2% inflation target is symmetric, meaning they expect inflation will drift mildly above and below it at different times.

The energy index was down the most among the major S&P sectors, falling 1.71% and extending its recent slide.

"We are a non-political institution", he said.

Powell said the inflation fell because low oil prices at the start of the year had worked through the system.

Stocks collapsed in December past year after the Fed raised its benchmark rates and signaled no backing off from its quantitative tightening.

In a supplemental statement, officials adjusted a tool they use to keep the fed funds rate within its target range, lowering the interest paid on bank reserves deposited with the Fed to 2.35 per cent from 2.4 per cent.

Stocks had been moving sideways right before the Fed's announcement.