Today’s Retail Sales number was expected to only show a 0.2% increase from last month, but instead, it up with 0.6% increase, which is the same upward trajectory as we saw 30 days ago. Stripping out car sales (which as you can imagine is a big number and therefore can be quite volatile) came in at 0.7% compared to last month’s 0.5%, and almost double the expected 0.4% increase.
Both stocks and bonds are shrugging off the hotter-than-expected retail sales report so far today, in part because the CBO reduced their forecasted GDP for year-end 2025 to a growth of only 1.5%. But the bigger factor, of course, is that today is the start of the today FOMC meeting. At the conclusion of the two day powwow tomorrow, we expect the Jerome & Co. to drop their overnight rate by at least 0.25%.
