Citi: Retail sales inconclusive for 50bp vs 25bp
Citi economists: "Total retail sales were modestly stronger than we expected rising by 0.1%MoM in August as auto sales fell by less than expected. Control group sales increased by 0.3%MoM mainly boosted by nonstore sales. The August retail sales print had the potential to push markets to more fully price in or out a 50bp policy rate cut by the Fed during this week’s meeting. However, the modest upside surprise was not enough to meaningfully change market pricing. We expect a 25bp cut this week but regardless of the size of the cut tomorrow we expect further softness in the labor market will push the Fed to cut rates by 125bp this year."