Impact of U.S. Retail Inflation on Federal Reserve Policies

Recent data on U.S. retail inflation suggests the likelihood of another Federal Reserve rate cut in the upcoming month. The consumer price index (CPI) numbers align closely with market predictions, resulting in an increased probability of a 25 basis point cut. However, there's concern among Fed officials about potentially overshooting the neutral rate, which could lead to more significant inflationary pressures in the future. Overall, the market is closely monitoring these developments while acknowledging the interplay between inflation data and central bank policy decisions.