Retail Sales dropped 1% in March in the US, a larger-than-expected contraction. Despite those numbers, analysts at CIBC still see the Federal Reserve raising rates in May, for the last time. 

Key quotes: 

“US retail sales fell sharply in March as consumers became more cautious, adding to other recent data releases that have signaled a deterioration in activity.”

“The Fed is looking for definitive signs of a cooling in activity and this print is a step in the right direction, but with sales volumes in the control group still 5.8% above their pre-pandemic trend level, this won't prevent a 25bp hike at the May FOMC."

“This data adds to signs of a deterioration in activity that will likely intensify in the second quarter, but the progress in cooling activity won't be enough to prevent a final 25bp Fed hike in May.”