Posted 1/17/2024, 4:26:23 PM
Stocks Drop as Strong Retail Data Damps Hopes for Fed Rate Cuts
- Stocks fell as December retail sales data showed the economy is still strong, reducing hopes for an early Fed rate cut
- The market had priced in aggressive rate cuts, leading to the Q4 rally; now investors are removing those expectations
- Inflation is not dead yet - core CPI remains around 3% and some underlying measures have accelerated
- The Fed likely won't cut rates until wage growth slows sustainably and inflation falls further, even if that causes a recession
- China's economy continues to struggle despite some stimulus efforts, part of a global economic slowdown seen in Europe as well