• Retail sales: US retail sales volume in August exceeded market expectations, rising 1.2% month-on-month after a revised 0.5% decline in July. On an annual basis, total retail sales growth accelerated to 6.0% from 5.0% in July, while the core measure rose from 5.5% to 6.7%. Annual growth accelerated in 11 of 15 categories, with key drivers including gas station sales, e-commerce, consumer electronics, and food services. The outperformance and broad recovery in consumer activity point to continued resilience in US households.
• FOMC watch: Following the September meeting, the US Federal Reserve raised its benchmark rate by 25 bps to 3.75–4.00%, citing strong economic activity, a resilient labor market, and geopolitical pressures on commodity prices. The Fed’s updated dot plot was more hawkish than expected: 16 of 18 FOMC members penciled in at least one more hike in 2026, and the estimate for the long-run neutral rate rose to 3.25%. In response, market analysts revised their base case and added another 25-basis-point hike at the October meeting, pushing the expected peak (terminal rate) of the current cycle higher. Meanwhile, the forecast for the long-run neutral rate remained in the 3.25–3.50% range, as current tightening is expected to be offset by an additional cut in March 2028, on top of previously assumed reductions at the end of 2027.