US Inflation Falls, Rate Cuts Likely

Recent economic data has alleviated recession fears and increased the likelihood of an interest rate cut by the Federal Reserve in September. Retail sales rose by 1% in July, exceeding expectations, while initial jobless claims fell to 227,000, indicating a resilient job market. Inflation has also cooled, with the Consumer Price Index (CPI) rising only 2.9% year-over-year, marking the lowest level since March 2021. Producer Price Index (PPI) inflation also decreased to 2.2% in July, further supporting a potential rate cut. These positive economic indicators have boosted investor confidence, leading to a stock market rally.