On May 14, Federal Reserve Chairman Jerome Powell delivered a speech at the Association of Foreign Bankers in Amsterdam.

Powell's comments were released following the Producer Price Index (PPI) report. The report indicated that the PPI for April increased by 0.5% month-over-month, and the core PPI also rose by 0.5%, surpassing analysts' expectations of 0.2%.

When asked about the PPI data, Powell remarked that the report was somewhat mixed. He specifically noted the revisions to previous reports, with March's PPI revised from +0.2% to -0.1% and core PPI also revised from +0.2% to -0.1%. Additionally, he projected robust economic growth, a strong labor market, and a moderation in inflation, although his confidence in the inflation outlook had diminished.

Regarding the Fed's next policy steps, Powell indicated that the current interest rate environment might persist longer than previously anticipated. However, he believed that the Fed was unlikely to raise rates further and that a rate cut was more probable. The current policy rate is restrictive in many aspects, but the Fed needs more time to assess whether it is sufficiently restrictive.

Powell was also asked about U.S. debt and fiscal policy. He opined that the U.S. fiscal policy was on an unsustainable path. At present, the issues with U.S. fiscal policy have not materially impacted the Fed's decision-making.

Following traders' reactions to the PPI data and Powell's comments, the Dollar Index declined and is currently attempting to break below the 105.00 level. As traders bet on the Fed not raising rates, Treasury yields have fallen.

The gold market has recently stabilized above $2,350. The decline in the dollar and Treasury yields has provided support to the gold market. The S&P 500 Index quickly rebounded after the PPI data was released, as traders favored Powell's dovish remarks, and the index is now approaching 5225 points.