“If you don’t bet, you can’t win. If you lose all your chips, you can’t bet.” Larry Hite

1. Fed Delivers First Rate Hike in Years With Unanimous Vote — The increase, approved unanimously, will raise the benchmark federal-funds rate range by a quarter point to between 3.75% and 4%. The vast majority of officials penciled in one more hike this year in interest-rate projections released after their meeting. Chairman Kevin Warsh vowed shortly after taking office in May to end an overshoot of the Fed’s 2% target now in its sixth year and followed through with an increase that had been widely anticipated in recent days. It also followed a lost year in the Fed’s inflation fight. The central bank has made no progress toward its 2% goal since mid-2025, including after cutting rates three times late last year to guard against a labor-market slowdown. Instead, the Iran war has lifted energy prices, and the AI boom has driven an investment surge that has buoyed the economy and markets.
2. U.S. Retail Sales Rebound in Show of Consumer Strength — Retailers’ sales rose by 1.2% last month to $773.9 billion, versus the 0.5% decrease recorded in July. The August reading was higher than the 0.8% increase economists polled by The Wall Street Journal expected. Sales in the so-called “control-group” categories that feed into the formula for gross domestic product-rose rose by about 1.4%.
Meanwhile, sales at nonstore retailers rose by 2.6%. Spending in other discretionary categories, such as electronics and appliance stores rose by 1.6%.
3. GM to Produce Patriot Missile Parts as U.S. Faces Critical Arms Shortage — The automaker is supplying parts for Lockheed Martin’s LMT -2.05%decrease; red down pointing triangle Patriot missiles, the defense contractor said Thursday—a potential lift to America’s munitions supplies depleted by the conflicts in Ukraine and the Middle East. Lockheed, which faces Pentagon demands to sharply boost munitions production, said GM delivered an initial batch of missile-housing components for PAC-3 MSE interceptors in August. Lockheed has spent the past year rushing to assemble new suppliers for its Patriot interceptor, a high-end missile capable of knocking down a range of airborne attacks. Dwindling Patriot stockpiles have left Ukraine dangerously exposed to Russian missile barrages for months, while the U.S. war with Iran has severely depleted American inventories.

strong>The week ahead — Economic data from Econoday.com:

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