Federal Reserve could be less aggressive at its upcoming meeting

The retail sales figure, eagerly awaited by investors as it could trigger more aggressive action by the Federal Reserve, despite being strong, was not enough for the Fed to use all the ammunition in the next meeting. An increase of 0.8% was expected in June, but a rise of 1% was published. Later, before the stock markets opened, industrial production and capacity utilization reports came in weaker, helping to quell any concerns about the economy overheating. Statements from some Fed members also allayed fears of a 100-basis point hike. Bostic, who earlier this week did not rule out 100 basis points, softened his tone by saying that moving "too dramatically" could undermine the economy. Bullard stated that he saw year-end interest rates at 3.75%, a quarter point above his last 3.5% projection. However, he did not comment on the next hike, leaving it open to the monetary policy committee’s decision. And finally, Daly said that the Fed is working to lower inflation without stalling the economy.