According to the US Census Bureau, retail sales growth in May slowed to 0.1% versus an expected 0.3% increase for the month. What does this signal from consumers and for potential changes in the Federal Reserve’s interest rate policy?
BlackRock Global Chief Investment Strategist Wei Li joins Catalysts to discuss her latest note addressing inflation, how it relates to the recent retail sales report, and why AI and tech may lead to an increase in overall inflation.
"Despite the fact that markets priced out five cuts by the Fed in 2024 compared to beginning of the year, equities are very strong. And the reason that equities are very strong is because we have seen very strong earnings driven by AI and tech-related names," Li explains. "So there is a bit of a disconnect between what rate markets are suggesting and what equity markets are actually doing. And the reconciliatory term here is the ‘rise of AI’ and what that means for powering stronger and stronger earnings, which is why we are positive on broad equity market."
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