The Fed: More powerful than bare-chested young men

Abercrombie & Fitch Co (NYSE: ANF), the provider of shopping bags with buff young men with shaved chests, reported a 13% drop in same store sales for the month yesterday. For the first quarter, a little over one month ago, comp sales increased 1%. This is a pretty big swing.

Hollister's comps were also down big, declining 17%. Hollister reported an 8% increase in comps for its 2007 first quarter.

Foot Locker Inc (NYSE: FL), another retailer to fashion-conscious teenagers, also came in with light comps, reporting a 5.1% decline. Investors now have to question whether Motorola Inc's (NYSE: MOT) weak 2007 performance has to do with a saturated wireless handset market or parents cutting back on the financial life support for their teenagers.

Broad-based weakness for apparel retailers follows very weak results for home-improvement retailers and some lightness in Whole Foods Market Inc (NASDAQ: WFMI) and Starbucks Corporation (NASDAQ: SBUX) comps.

Retail data points clearly demonstrate that the Fed's interest-rate increases are doing its job. No matter how compelling a shopping-bag marketing strategy is to drive teenage-girl traffic into stores, at the end of the day, when the Fed wants to cut down on consumption, it is all powerful -- no matter how much complaining a teenage daughter can do.