Retail Sales Are the Last Big Economic News Before Fed Rate Decision

Tuesday’s retail sales report could be the scrap of evidence that tips the balance as Federal Reserve officials decide how much to cut interest rates on Wednesday.

It is practically a given that the central bank will reduce rates. Inflation has fallen to its lowest point since February 2021, giving the Fed more flexibility to focus on the second component of its dual mandate—achieving maximum employment. Although the labor market remains resilient, the most recent two jobs reports have been weaker than expected, putting some pressure on the Fed to loosen monetary policy.

The question now is by how much rates will fall—0.5 percentage point, or 0.25 point? The indications from interest-rate futures are split , recently favoring the more aggressive half-percentage-point decrease.

Andrew Hollenhorst, an economist at Citi , leans toward the likelihood the Fed is more cautious on Wednesday, cutting rates by 0.25 percentage points. But he notes that it it is a close call that depends on the dynamics of the bank’s rate-setting committee and the strength or weakness of Tuesday’s retail sales report.

A positive surprise would suggest that both consumers and the labor market remain resilient, paving the way for a more modest cut. If the report comes in well below expectations, however, Fed officials may grow concerned that a weaker labor market is weighing on consumer spending, which could lead to a bigger cut, Hollenhorst added.

Louis Navellier, founder and chief investment officer of the money-management firm Navellier agrees. “In theory, if the August retail sales report is horrible, then a 0.5% Fed key interest rate cut may be forthcoming on Wednesday,” he said.

Economists are expecting retail sales will decline by 0.2% in August from July, according to FactSet. They jumped by a surprising 1% in July .

Lower gasoline prices and car sales will likely drag the headline number lower. Indeed, stripping out car and gas sales, retail sales are projected to increase by about 0.3% month over month.

Yet there is growing concern that even excluding autos and gas sales, the sales figure will be soft. While spending was remarkably strong in July, the Fed’s latest Beige Book flagged that consumer spending ticked down in August, points out Bill Adams, chief economist for Comerica Bank . Many retailers, particularly those catering to lower-income shoppers, have warned that Americans are being cautious and exceedingly choosy about what they are buying and where.

The impact of the retail sales report will likely extend beyond the immediate rate cut. The insights it contains about U.S. consumers will also factor into the Fed’s quarterly update to its Summary of Economic Projections, containing officials’ latest forecasts for the U.S. economy, inflation, and near-term interest rates.

The so-called dot plot , which charts the individual interest-rate projections of the seven members of the Fed’s board of governors and the 12 regional Fed presidents, is always closely watched as investors try to chart the Fed’s future actions.

Hollenhorst believes the median dot showing where rates will be at the end of 2024 should show “at least” 0.75 percentage-point of cuts, factoring in 0.25 point at each meeting through the end of the year. But it is likely that officials will leave the door open for more cuts in case data on the job market or consumer spending sour faster than expected.

Art enthusiasts may wax poetic about yellow, one of the oldest hues in the history of art. The colour can be seen in some of the world’s most ancient works from Egypt and Rome, and pieces by Gauguin and Van Gogh reveal that these iconic painters were wild about yellow.

Although it may be the lightest hue on the basic colour wheel, yellow’s not the most timid. Sure, yellow can be soft and sweet, but it can also pack a punch. Designer Matthew Boland of MMB Design in Scottsdale, Arizona, praises the hue’s power in interiors.

“Yellow can be soothing or electric; it is a very versatile colour,” Boland said. “The warmth of yellow and the flexibility of yellow make it extremely appealing to all.”

Mansion Global asked Boland and three other interior designers to share suggestions on decorating with the myriad moods of yellow, one of home décor’s hottest colours in 2025.

Coat a Room in Soft Yellow

“Butter yellow is a beautiful soft colour that doesn’t read feminine, which is why you are seeing it pop up on the men’s and women’s runways. It is a colour that is beautiful with all skin tones and reads neutral when paired with other colours. It is warm and inviting while being whisper quiet. undefined undefined “I love red and butter yellow, they are both warm tones and they pair well together. I also like cobalt blue and a great bright green. Turquoise is also extremely complimentary.

“I love yellow drapery, it catches and reflects light beautifully. I love it for outdoor upholstery as it looks amazing with green plants and grass, and I love it in lacquered furnishings because it changes with the light during the day.”

—Matthew Boland, MMB Studio in Scottsdale, Arizona

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Dust a Room With Yellow Accents

“From butter yellow to citron and canary to goldenrod, this optimistic and cheerful hue lends itself well to interiors and fashion as it ignites a smile and happy mood. The bright yellow in this classic check pattern [pictured] with a white background adds charm to the room.

“Consider adding a pair of yellow velvet pillows to your sofa; a bright yellow throw over your favourite chair, or maybe even just a large bouquet of yellow flowers for your coffee table. (Or try) painting a bathroom cabinet and trim for a fun refresh.”

—Designer Maggie Griffin in Gainesville, Georgia

Balance Bold Yellow With Neutrals Like Grey, Black and Navy

Yellow can be used as an accent colour in just about any single piece of furniture or accessory, or as the focal shade in a space.

“If you use yellow throughout a space or on large surfaces, keep the other colours in the room on the neutral side. It can be difficult to add other shades of yellow or introduce another colour into the space, so keep other furnishings and accessories neutral, allowing the yellow to be the focal point.

“In this room, yellow is the primary colour of the wallpaper, evoking warmth and calm. This yellow wallpaper also reflects natural light, making the room brighter. [Yellow] enhances vintage spaces, such as this older, historic residence, but can also be used in more contemporary designs.

“Grey and white are the primary accent colours because they are subtle, allowing the yellow to shine. But other neutrals, such as black or navy, look beautiful with yellow as well and act as a secondary colour that enhances the yellow tones without taking away from it.”

—Designer Kelley Proxmire in Bethesda, Maryland

Drench a Room in Goldenrod Yellow

“I love using yellow in rooms that need to echo positive energy–– everything from kitchens, laundry and mudrooms, to kid bedrooms and playrooms. Yellow belongs everywhere.

“Pairing yellow with too many bright colours versus balancing it out can make it too loud or overbearing. Use colour theory to ensure balance and harmony with your selections in a space. Examples of this include pairing yellow with its complementary colour, blue (complementary colours are any two colours that are directly opposite each other on the colour wheel) or its analogous colour, orange or green (analogous colours are located next to each other on the colour wheel). Pairing yellow with a colour like red would be more harsh and not as compatible.

“I used this colour, Sherwin-Williams Tassel, in this guest bedroom [pictured] to create a colour-drenched, beautiful oasis that feels like a boutique hotel. We balanced out the bright colours with neutral furnishings and bedding, and bolder colours on the upholstered bed, rug and artwork.”

—Amber Guyton, Blessed Little Bungalow in Atlanta

Retail Sales Are the Last Big Economic News Before Fed Rate Decision

Whether it’s a soft butter or a rich shade of mustard, the sunny shade is showing its versatility in interior design.

Coat a Room in Soft Yellow

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Dust a Room With Yellow Accents

Balance Bold Yellow With Neutrals Like Grey, Black and Navy

Drench a Room in Goldenrod Yellow