Fed May Consider Rate Cuts Amid Strong Retail Sales

According to Odaily, Scott Helfstein, Head of Investment Strategy at Global X, stated that the Federal Reserve is likely to take note of the continued strength of consumers following better-than-expected U.S. retail sales in August. Helfstein mentioned that with a CPI inflation rate of 2.5%, a real interest rate of 300 basis points might be too high. However, the Federal Reserve has the flexibility to initially reduce rates by 25 basis points or even by a full 50 basis points. The key point, according to Helfstein, is that the Federal Reserve begins to cut rates, and the extent of the rate cuts may not be significantly tied to economic conditions. He noted that in recent months, retail sales growth has been slightly below the long-term average but continues to grow at a moderate pace.