US Fed Rate Cut of 50 Bps Clouded By Retail Sales and Jobless Claims; ECB Cuts Rate

Mixed Economic Signals Keep US Fed Rate Cut on the Table, ECB Follows Suit

The outlook for the next US Fed rate decision was clouded by stronger-than-expected retail sales and a decline in jobless claims. This signaled resilient economic activity despite mixed data.the European Central Bank’s recent rate cut to 3.25%, its third of the year.

These factors contribute to a complex backdrop for the crypto market. Lower rate typically support risk assets like Bitcoin. Yet, persistent uncertainty leads to temporary downward pressure on digital asset prices.

The S&P 500 managed to inch higher at the opening bell following that news.The market was acting optimistic, but there were caution signals as the trends were not likely to last longer

Stronger-than-expected retail sales data raised some questions. most of them were regarding the Fed possibly holding off on easing rates at December meeting.

Claims for jobless benefits fell to 241,000 in a week.This is well below the forecast that continued to show labor markets’ resilience.

ECB Cuts Rates, Maintains Optimistic Inflation Outlook

The European Central Bank cut its key interest rate to 3.25% at an October meeting. This was the third 0.25% cut this year. The move had been expected after policymakers had indicated that the economic outlook was weakening and inflation pressures were easing. In a statement, the ECB’s Governing Council said the disinflation process was “well on track”This represents the most optimistic outlook during this cycle

Inflation in the euro zone slowed to 1.8% in September—below the ECB’s target of 2% for the first time in three years.central bank still sees a risk of temporary increases that could temporarily push inflation above the target. the first consecutive rate cut from the ECB since December 2011

ECB President Christine Lagarde said the central bank discussed only a 25bp cut and not a larger 50bp cut. This contrasts with the US Federal Reserve’s decision in September to cut by 50bps.