Investing.com – Financial markets pushed back expectations for the Federal Reserve (Fed) to move forward with the normalization of monetary policy by six months on Friday after a weak retail sales figure and an expected decline in producer prices for the start of the third quarter.
Retail sales were unchanged in July, coming in under forecasts and causing concern over the strength of the American consumer to boost the economy.
Core producer prices, considered a leading indicator of inflation, also unexpectedly fell in July, removing pressure from the Fed to begin tightening policy.
On Thursday, Fed fund futures had shown a 51.9% probability of a rate hike in December. After the data, the odds no longer pass the 50% threshold until the June 2017 decision.
The data came just a day after an interview with San Francisco Fed president John Williams revealed that he still thought the U.S. central bank should raise rates this year.
Also on Thursday, a Reuters survey revealed that economists were still predicting the Fed to increase rates, likely at the December meeting.