December’s flat retail-sales reading prompted bond market recalibration, sending benchmark 10-year yields to 4.14%, lowest in nearly a month. Fed-funds-futures traders priced in a 19.6% chance of a rate cut next month. Analysts predict U.S. growth may not be as strong as presumed, affecting global markets with potential inflation drop.

Retail sales data for December revealed stagnant consumer spending, leading to concerns of weaker U.S. growth. European bond markets rallied following the U.S. data release. Chief economist Gregory Daco noted affluent households spent during holidays, while others were cautious, relying on credit and savings. Analysts anticipate inflation decline in the first quarter.

Read more at Yahoo Finance: The U.S. bond market is suddenly flashing a warning sign about the economy