Stocks Drop as Solid Data Fuel Fed-Pivot Repricing: Markets Wrap
- Swap traders scrap bets on Fed rate cuts starting in March
- US retail sales rise by most in three months to cap holidays
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Stocks retreated and bond yields climbed on speculation the Federal Reserve will be in no rush to cut interest rates as the economy shows signs of resilience.
At a time when good economic news is not really that great from a policy perspective, a solid reading on retail sales fueled concern about Wall Street’s bold dovish bid. And with central bank officials recently striking a more cautious tone about prospects for easing, it ended up being the perfect recipe for traders to push back the timing for the first Fed move — assigning lower odds of a rate reduction in the first quarter.