Fed Rate Hike Expectations Plummet Amid Weaker U.S. Data

Market expectations for a Federal Reserve rate hike have diminished following the release of weaker-than-expected U.S. retail sales and consumer sentiment data.

Retail sales in July declined by 0.6% to $763.6 billion, marking the first drop in nine months, while the University of Michigan's consumer sentiment index fell to 51.0 in August from 55.2 in July.

Market participants are interpreting these indicators as reducing the likelihood of a near-term rate hike by the Fed.

The FedWatch tool shows a decrease in the odds of a September rate hike from 50.0% a month ago to 22.5% on August 14, according to market pricing.