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Weak retail sales data dampens Fed rate-hike expectations
Weak retail sales data released recently have led market participants to lower their expectations for additional Federal Reserve interest rate hikes in the near term. In response to these dampened rate-hike expectations, Treasury yields declined and the US dollar fell to its lowest level since May, as traders reassessed the economic outlook based on the disappointing consumer spending figures.
Key takeaways
- 1.Retail sales data came in below expectations, signaling potential weakness in consumer spending
- 2.Market participants reduced their probability estimates for future Fed rate hikes in 2024 following the weak data
- 3.Financial markets responded with Treasury yields falling and the US dollar declining to May lows, reflecting reduced expectations for higher interest rates
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