UBS: The possibility exists that "terrifying data" could influence the extent of Federal Reserve rate cuts

Before the Federal Reserve's interest rate decision, the U.S. retail sales data, often referred to as "terror data", will be released. UBS stated that they are closely monitoring retail sales and industrial production data, as their weakness could influence the Fed's decision to cut the federal funds rate by 50 basis points instead of 25. UBS said that current US inflation has slowed down enough for a rate cut. The institution outlined their "basic expectation" that the Fed will cut rates by 100 basis points for the rest of this year and another 100 basis points in 2025. UBS added that with an accelerated pace of interest cuts, the dollar will further decline and gold prices will rise further.