Weekly Economic Snapshot: Resilience Amid Record Sentiment Lows

Markets closed last week with the S&P 500 extending a historic rally, finishing at a fresh record high and up 0.5% for the week as investors positioned ahead of the Fed decision. Economic data were mixed: headline retail sales jumped 1.7% in March (core sales +1.9%), but much of the gain reflected a 15.5% spike in gasoline spending, while control retail sales rose a milder 0.8%. Consumer sentiment hit a record low (Michigan index 49.8), with near-term inflation expectations jumping to 4.7%. Treasury yields ended the week with the 10-year at 4.31% and the 2-year at 3.78%. The market now prices a near-certain Fed hold, with little change expected through 2026 and two 25 bp cuts penciled in for late 2027. Net effect: equity momentum (S&P) remains intact, but weakening consumer confidence and higher inflation expectations add caution for consumer-linked sectors and retail/consumer ETFs ahead of the Fed statement.