US retail sales were undoubtedly strong with the control group at +0.8% compared to +0.3% expected. That was above the highest economist estimate, though it is tempered by the revisions to the prior month to -0.3% from 0.0%.
Initially, the market shifted to favoring 100 bps on the data but it's since given that back. Implied pricing is now 27% of 100 bps, back to where it was pre-data. US 2-year yields are also back to 3.11% after touching as high as 3.18%.
What Waller said was this:
"If that data come in materially stronger than expected, it would make me lean towards a larger hike at the July meeting"
There's a bit to unpack here. Maybe this isn't material enough? The market is also considering the source. Waller is a hawk and if he has a slight lean towards 100 bps, that's not going to be enough to convince the core of the FOMC.
