U.S. Retail Sales Impact Short-Term Interest Rate Futures

U.S. short-term interest rate futures declined following stronger than anticipated retail sales data. Despite this, traders still expect a rate cut from the Federal Reserve next month, although the probability of a quarter-point reduction dropped to 89% from 94%. Another rate cut is anticipated later this year.

U.S. short-term interest rate futures registered a decline after Friday's data revealed that retail sales exceeded expectations last month. This unexpected boost in consumer spending caused a reevaluation of market forecasts.

Even with robust retail sales figures, traders are maintaining their belief that the Federal Reserve will proceed with interest rate cuts next month. However, the odds of a quarter-point reduction have been adjusted slightly from 94% to 89%.

Looking further ahead, financial stakeholders are predicting an additional rate cut by the Federal Reserve before the year's end as the economic landscape continues to shift.

(With inputs from agencies.)