The last economic data report that has the potential to change the tone of the upcoming FOMC meeting on April 30-May 1 is retail and food services sales at 8:30 ET on Monday. Sales were weaker in January and rose modestly in February. How the March number shapes consumer spending for the first quarter depends on a number of factors. Unit sales of motor vehicles were slightly softer in March, but the dollar value of sales may not be much changed. Gasoline prices rose in March, but some of this may be accounted for by seasonal adjustments since modest price rises are typical at this time of year.

What may be more influential is confluence of the timing of spring break at schools and the Easter observance which fell early this year on March 31. This may have pulled some spending from April travel and celebrations. Additionally, tax refund season shows that the average tax refund ended March at $3,050 which is higher than the $2,910 at the end of March in 2023. Consumers may have a decent sized lump sum to spend, save, or pay down debt. Some at least will be spent, likely on bigger ticket household items and activities associated with spring like home repair and gardening.

The most recent data on inflation and the labor market has dampened hopes of a rate cut by the FOMC sooner rather than later. The anecdotal evidence about US economic conditions in the Beige Book set for release at 14:00 ET on Wednesday should help solidify those impressions. While the Beige Book is unlikely to paint a picture of a robust economy, the past two reports have pointed to firming in conditions that should be sustained in the period from late February through early April.

The communication blackout period around the next FOMC meeting will go into effect at midnight on Saturday, April 21 and last through midnight on Thursday, May 2. The coming week will be the last opportunity for Fed policymakers to speak in public about their respective outlooks for monetary policy.

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