US retail sales

US retail sales data was released overnight, another very strong print.

Our view: the Fed will remain aggressive in the outlook for rates until this excess demand moderates, at the least towards trend and possibly for a period of overshooting.

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Financial markets are well grounded in the concept of “don’t fight the Fed”. Here, it is the consumer doing the fighting the Fed, and thus far, is winning.

That will keep inflationary pressure high, and hence the aggressive repricing of rates until it is not.

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Please note that past performance is not a reliable indicator of future performance.

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