Expectations for a Federal Reserve rate hike have diminished following the release of weaker-than-expected U.S. economic data. Retail sales declined by 0.6% to $763.6 billion in July, marking the first drop in nine months, while the University of Michigan consumer sentiment index fell to 51.0 in August from 55.2 in July. The odds of a September rate hike dropped from 50.0% a month ago to 30.6% on August 14, according to the FedWatch tool. Market participants are interpreting these indicators as reducing the likelihood of a near-term rate hike by the Fed.
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