Amundi Chief Forecasts Fed Rate Cuts in 2027, Gold Target $5,500 Amid Bullish China Outlook

According to Amundi's global head of solutions John O'Toole, the firm maintains that the Federal Reserve's next policy shift will be rate cuts in 2027, not aggressive rate hikes as current market pricing suggests. Despite the May U.S. jobs data beating expectations and Fed concerns about potential further rate increases, O'Toole believes the central bank will hold rates steady, citing strong U.S. economic fundamentals, a healthy labor market, and well-anchored inflation expectations. The firm also projects gold prices could reach $5,500 within 12 months from current levels near $4,300, reflecting the precious metal's value as a hedge against currency depreciation, fiscal deficits, and rising global debt.

On technology valuations, O'Toole dismissed early concerns about a "tech bubble," characterizing recent market weakness as a healthy repricing and earnings digestion rather than structural instability, given AI's solid productivity gains. From a European investor perspective, Amundi takes a long-term bullish stance on China, citing visible innovation progress and structural economic transformation despite housing sector headwinds. The firm recommends global diversification across regions and sectors to navigate near-term market volatility.