Fed Rate Hike Bets Fade as Softer Inflation Data Meets Consumer Resilience

The probability of a Federal Reserve rate hike in September has plummeted to 34.4%, down from over 50% just yesterday, after a wave of softer U.S. data prompted traders to sharply reprice monetary policy expectations. The dramatic shift comes as cooler inflation and weak retail sales reports challenge the hawkish narrative that had been building.

Behind the Data

August has delivered a string of underwhelming economic reports that have steadily trimmed bets on Fed...