In This Article:
Retail sales came in weaker than expected, while inflation prints were higher, leading to questions about the economic outlook. UBS senior economist Sonia Meskin joins Market Domination to note that while retail sales can be volatile, January has been difficult to forecast.
"Inflation did come in hotter than expected," Meskin says. "January has been, for the CPI specifically, a quite seasonally difficult month to forecast, and some of this strength can be quite temporary," expecting "inflation to continue to decelerate longer term."
Regarding the Federal Reserve’s interest rate policy, Meskin explains, "We now expect the Fed to pause for a considerably longer period of time than we were thinking earlier in the year. And the big uncertainty here, of course, around everything you're trying to do when you forecast the Fed, is what happens with fiscal policy?"
Meskin also expresses concern that tariffs could have a larger negative impact on economic growth than currently reflected in the market (^GSPC, ^IXIC, ^DJI). Although consumers remain strong, Meskin cautions that inflation would continue to eat into their ability to spend.
Related Videos
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
This post was written by Josh Lynch