Fed Rate Hike Odds Plummet on Weaker Retail Sales and Sentiment

Market expectations for a Federal Reserve rate hike have decreased 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.

The indicators have been interpreted as reducing the likelihood of a near-term rate hike by the Fed, with the odds of a September rate hike dropping from 50.0% a month ago to 30.6% on August 14.