US retail sales were much stronger than expected in this week’s only top-tier data release out of the world’s largest economy.

If you were already predisposed to fade recent extremes in rate-cut pricing, the nominal spending update will harden your hawkish conviction.

The headline showed a 0.6% increase for December, much better than the 0.4% economists expected.

It was the eighth increase in nine months, and it doesn’t exactly scream “slowdown.” Eight of 13 categories showed an increase. Spending at food and drinking places, the only services sector category in the report, was flat.

More notable than the headline beat were the underlying aggregates, and particularly the control group, which jumped 0.8%, quadruple consensus. That’ll be a boon to Q4 GDP estimates. The ex-autos increase, 0.4%, was double forecasts. Excluding autos and gas, a 0.6% gain likewise doubled up projections.

Plainly, the release undercut (no pun intended) the case for a March rate cut from the Fed. Bonds were back-footed on Tuesday by remarks from Chris Waller, who emphasized that rate reductions in 2024 need to be “methodical and careful.” That, as opposed to the reckless, rapid and haphazard cuts the market needs to justify current equity multiples. (I’m just joking. But not really.)

A few days ago, I suggested the US retail sales release likely wouldn’t dislodge March cut wagers. Specifically, I wrote that, “retail sales could conceivably erode what’s now quite a lot of conviction around a March cut, but it’d take a multi-standard deviation upside surprise to upend those bets entirely.”

That’s probably still the best way to think about things, but to be clear: December retail sales argued decisively against a quick pivot to rate cuts by the Fed.