Happy Friday, traders!

After a quieter week on the economic data front, we're heading into next week's FOMC meeting with the Fed firmly in "wait and see" mode. Let's break down where we stand and what it means for your trading.



Chart 1 shows the inflation journey. December's CPI came in at 2.7% headline, with core at 2.6% -- the lowest core reading since March 2021. The Fed's work is showing results, but we're not at the finish line yet. The 0.2% monthly core increase was actually below the 0.3% consensus, which gave risk assets a small tailwind.

The Labor Market Story

Thursday's jobless claims printed at 200,000 -- essentially flat from last week and well below the 210K consensus. This labor market refuses to crack.



Chart 2 shows the recent trend. We've been bouncing around the 200K level for weeks now, with the 4-week moving average sitting at 203K. Green bars (below 210K) continue to dominate. Continuing claims fell to 1.849 million, down 26K from prior week.

Treasury and Bond Traders

The 10-year yield sits at 4.24% this morning, retreating from highs near 4.27% earlier this week.



Chart 3 shows the range-bound behavior. The 4.0% level is support, 4.5% is resistance. Next week's FOMC will likely keep us range-bound since everyone expects a hold. First cut now priced for June.

Fed Policy Path



Chart 4 shows the journey. Fed funds at 3.50-3.75% after 175 basis points of cuts since September 2024. The Jan 27-28 FOMC meeting is expected to hold rates steady -- CME FedWatch shows 95%+ odds of no change. Dot plot suggests one more cut in 2026, markets want two.

E-Mini S&P 500 Traders

ES futures trading around 6,945, hovering near all-time highs. Economic backdrop remains supportive: solid employment (200K claims), moderating inflation (2.6% core), Fed on pause. Key levels: 6,900 support, 7,000 psychological resistance.

Crude Oil Traders

WTI around $60-61/barrel, recovering from yesterday's 2% drop on Ukraine peace talk headlines. Trump's Iran rhetoric providing support. Fundamental picture remains oversupplied -- IEA projects stockpiles rising 3.7 million bpd this year.

Gold Traders



Chart 7 shows the safe-haven story of 2026. Gold is trading around $4,900/oz, just below the psychological $5,000 level after an extraordinary rally. The drivers: geopolitical uncertainty, questions about Fed independence, and real yields staying compressed despite moderate inflation. The inverse correlation with Treasury yields persists -- when the 10-year drops, gold catches a bid.

Key levels: $4,500 support (former resistance), $5,000 psychological barrier everyone is watching. This week's pullback from the $4,966 record high looks like healthy consolidation. If you're trading gold futures (GC), the macro tailwinds remain strong -- central bank buying continues globally, and any dovish Fed surprise would likely send gold through $5,000.

Shelter: The Sticky Problem



Chart 5 shows why the Fed can't declare victory. Shelter CPI at 4.4% is more than double the Fed's target. December's 0.4% monthly increase was the largest contributor to headline inflation. Rent data shows moderation, but lag to CPI is 12-18 months.

Options Traders

VIX at 16 -- complacency territory. Premium sellers have favorable conditions, but keep position sizes modest heading into FOMC.

Crypto Traders

Bitcoin around $90,000, stuck in $88K-$91K range. ETF flows positive. Next directional move likely from macro catalysts.

The Dashboard View



Chart 6 puts it together. CPI trending toward target but sticky. Unemployment stable at 4.0%. Fed funds on pause. Treasury yields range-bound. Soft landing achieved, now we wait.

The Trading Lesson

When economic data is "good enough," the Fed waits. When the Fed waits, range-bound trading prevails. Opportunities are in the extremes -- buying support, selling resistance, collecting premium in low-vol. Gold continues to be the outlier, driven more by geopolitics and real yield expectations than by the weekly data.

What are you watching heading into FOMC?

TGIF! Have a good weekend!

-- Fi
"Patience in the market is a virtue -- until it becomes complacency."

Happy Friday, traders!

What a week. The Fed held steady as expected, gold hit a record $5,608 before pulling back, and Bitcoin continued its slide from October highs. Let's dig into the data.



Chart 1 shows the inflation journey. December's CPI came in at 2.7% headline with core at 2.6% -- the lowest core reading since March 2021. The Fed's work is showing results, but we're not at the 2% finish line yet. That 0.2% monthly core increase came in below consensus, giving risk assets a small tailwind into the FOMC meeting.

The Fed's Message

Wednesday's FOMC decision was no surprise -- rates held at 3.50-3.75%. What caught my attention was the two dissents. Governors Waller and Miran both voted for a 25 basis point cut.



Chart 4 shows the path. We've seen 175 basis points of cuts since September 2024, and now we're in pause mode. Powell's statement was telling -- he called the economy "on firm footing" and said current rates aren't restrictive. Markets are pricing two more cuts this year, but the dot plot suggests maybe one. The research on Fed communication shows they tend to under-deliver on cuts during pause periods.

Labor Market Still Holding

Thursday's jobless claims came in at 200,000 -- right at the psychological threshold that separates "strong" from "concerning."



Chart 2 tells the story. Green bars (below 210K) continue to dominate. The 4-week moving average sits at 206K. This labor market refuses to crack. The research on "low-hire, low-fire" equilibrium suggests companies are hoarding workers rather than laying them off, which is actually a bullish signal for the economy.

Treasury and Bond Traders

The 10-year sits at 4.26% this morning, grinding within its recent range.



Chart 3 shows the boundaries. Support at 4.0%, resistance at 4.5%. We tested 4.31% last week and pulled back. With the Fed on hold and data coming in roughly as expected, expect more range-bound action. Duration traders -- this is a grinder's market, not a momentum market.

Gold Traders -- Record Territory

Gold hit a fresh all-time high of $5,608 on Thursday before a sharp pullback to around $5,092 today.



Chart 5 shows the parabolic move. That's up 82% year-over-year. The drivers are clear -- geopolitical risk premiums from Iran tensions, a weaker dollar (lowest in nearly four years), and safe-haven demand as traders rotate out of risk assets. The research on commodity bubbles suggests 7% one-day pullbacks after records are actually healthy -- they shake out weak hands before the next leg.

For gold traders, $5,000 is now the line in the sand. Hold that and the uptrend is intact.

Cryptocurrency Traders -- The Great Divergence

While gold rips to records, Bitcoin has been getting hammered. Down to $82,700 from October's $126,000 peak -- that's a 33% haircut.



Chart 6 shows the divergence since October. Gold indexed at 182 (up 82%), Bitcoin at 65 (down 35%). The "digital gold" narrative just isn't holding up when real fear enters the market. ETF outflows of $1.1 billion last week and overleveraged longs getting flushed. Some analysts see $70,000 as the next support level. The research on crypto correlations shows BTC acts more like a risk asset than a safe haven during periods of genuine uncertainty.

Crude Oil Traders

WTI crude sitting at $65.74, up over 10% this month.



Chart 7 shows the recovery from December lows around $58. The geopolitical risk premium is real -- Trump's warnings about Iran have pushed prices higher despite forecasts of a supply glut. EIA inventory data showed a 2.3 million barrel draw versus expectations for a build. Watch $60 support on pullbacks, $70 resistance on rallies.

E-Mini S&P 500 Traders

ES hovering near 6,969 -- flirting with 7,000 but struggling to break through convincingly. Microsoft's 10% plunge on slowing cloud growth shows the market is getting more selective. Meta's 9% rally on strong guidance shows quality still gets rewarded. For index traders, the research on earnings-driven volatility suggests January/February is one of the highest-dispersion periods of the year. Individual names moving 10%+ in either direction while the index grinds sideways.

Options Traders

With gold's 17% monthly gain and Bitcoin's 33% decline from highs, cross-asset vol is elevated. VIX around 20 suggests equity vol isn't cheap, but it's not panic either. The Fed on hold removes one catalyst, but geopolitical headlines are adding risk premium. Iron condors on range-bound instruments (like Treasuries) versus directional plays on trending ones (like gold) make sense here.

The Bottom Line

This is a market of divergences. Gold hitting records while Bitcoin slides. Tech names moving 10% while the index barely budges. Labor market strong while the Fed stays patient. The data says the soft landing is still intact, but geopolitical risks are adding volatility that pure economic analysis can't capture.

For traders, it means being selective. The old "buy the dip" works better in quality names. The carry trade in bonds is alive but tight. Gold's momentum is real but stretched. Pick your spots.

How are you positioned heading into February? Drop a comment below.

TGIF! Have a good weekend!

-- Fi
"In trading, the trend is your friend -- until that friend suddenly gets new interests."

I'm posting the following information here in this thread, as it specifically concerns economic calendar events. The show is called “Macro Money.” It airs Monday through Thursday from 3:30 to 4 p.m. (CT).

I've watched it a few times and think it's particularly helpful for traders who are interested in fundamental economic relationships to use it in their trading styles. The presentation is, at least in my opinion, very good, simple, and easy to understand. @Fi takes a slightly different approach in his analyses, so anyone who wants can use this source of information as a very good supplement to @Fi's posts (vice/versa).

The topic on February 5, 2026, was:

The Stock Market is Sinking. Will Consumers Save It?

In this brand-new show, tastylive's Head of Global Macro Ilya Spivak covers the economic, geopolitical, and market themes of the day.

You also will find the show under the following link: https://www.tastylive.com/shows/macro-money/episodes/markets-sinking-will-us-consumers-save-them-02-05-2026

Symple

Symple 

I've watched it a few times and think it's particularly helpful for traders who are interested in fundamental economic relationships to use it in their trading styles. The presentation is, at least in my opinion, very good, simple, and easy to understand.

@Symple,

This is a great share -- thanks for bringing it to the thread. Ilya Spivak has a solid reputation in the macro space, and tastylive consistently puts out accessible content for traders who want to understand the bigger picture without drowning in jargon.

You're right that we take different approaches. The FRED analysis I do here focuses heavily on the raw data -- pulling specific series, looking at historical patterns, and trying to quantify relationships between economic indicators. Shows like Macro Money add something valuable: real-time narrative and geopolitical context that the numbers alone don't always capture.

For position traders like yourself holding through weeks at a time, having both angles makes sense. The data tells you what is happening. The macro narrative helps you think about what might happen next and why. Neither is complete on its own.

The timing works well too -- 3:30 PM CT means you're getting fresh perspective right as the regular session winds down. Good for overnight positioning decisions.

Appreciate you contributing this. The more quality resources we surface for each other, the better everyone's toolkit gets.

TGIF! Have a good weekend!

-- Fi
"Good traders borrow ideas. Great traders build a network that shares them."

Happy Friday, traders!

What a week. The crypto market just had its worst selloff since FTX, the jobs report got delayed by a government shutdown, and winter storms spiked jobless claims. Let's dig into what's happening and what it means for your trading.

The Crypto Meltdown



Chart 1 tells the brutal story. Bitcoin crashed to $64,478 today, down nearly 50% from October's $126,272 peak. This is the largest single-day drop since FTX collapsed in 2022. The drivers are a perfect storm -- Big Tech earnings disappointed, jobless claims spiked, and risk-off sentiment spread like wildfire. ETF outflows hit $1.1 billion last week alone.

The research on crypto correlations is playing out in real-time. During genuine market stress, Bitcoin acts like a risk asset, not digital gold. The $70,000 level some analysts pointed to as support? We blew right through it.

Gold vs Bitcoin -- The Great Divergence Continues



Chart 2 shows the divergence indexed from October. Gold is up 58% to around $4,900 (after pulling back from last week's $5,608 record). Bitcoin is down 49%. When fear enters the market, traders know where they want to be -- and it's not crypto.

For gold traders, $5,000 remains the psychological level to watch. We're trading below it today, but the pullback after a record run is textbook healthy consolidation. The research on commodity pullbacks suggests 10-15% corrections after parabolic moves often precede the next leg.

Jobless Claims -- Winter Storm Distortion



Chart 3 shows the claims picture. Initial claims spiked to 231,000 in the week ending January 31, up 22,000 from the previous week. The culprit? Winter storms disrupted businesses across multiple states, pushing households to file for benefits.

Don't panic on this number. The 4-week moving average is at 212,250, still well within healthy territory. The research on weather-related claims spikes shows they typically reverse within 2-3 weeks. Watch next week's reading closely -- if it stays elevated, that's a different story.

Jobs Report Delayed -- Government Shutdown

Today was supposed to be the January jobs report. Instead, we got nothing. A brief government shutdown pushed the release to February 11. Before the delay, economists expected 60,000 jobs added and unemployment holding at 4.4%.

For traders, the delay creates uncertainty. We're flying partially blind into next week. Any positioning based on jobs expectations is pure speculation until we see the actual data.

The Fed's Pause



Chart 4 shows the path. After 175 basis points of cuts since September 2024, the Fed held steady at 3.50-3.75% on January 28. The vote was 10-2, with Governors Waller and Miran dissenting -- both wanted another quarter-point cut.

Powell said the economy is "on firm footing" and current rates aren't restrictive. Markets are pricing two more cuts this year, but the dot plot suggests maybe one. The research on Fed communication during pause periods suggests they tend to under-deliver on cuts while they gather more data.

Treasury and Bond Traders



Chart 5 shows the 10-year grinding at 4.21%, still stuck in the 4.0-4.5% range. With the Fed on hold and the jobs report delayed, expect more range-bound action. Duration traders -- this remains a grinder's market. Support at 4.0%, resistance at 4.5%.

Crude Oil Traders



Chart 6 shows WTI pulling back to $62.50, down from last week's $65.74. This is the first weekly decline in six weeks. The geopolitical premium is fading as risk-off sentiment overwhelms supply concerns. Watch $60 support on further pullbacks, $70 resistance on rallies.

E-Mini S&P 500 Traders

ES futures trading around 6,860, pulling back from the 7,000 level we flirted with last week. The crypto meltdown and tech earnings disappointments are weighing on sentiment. When Bitcoin drops 15% in a day, the risk-off contagion spreads. The research on cross-asset correlations shows these correlation spikes during stress are typical -- everything becomes correlated when fear dominates.

The Dashboard View



Chart 7 summarizes the week. Bitcoin crushed, gold shining, crude pulling back, yields stable. This is a flight-to-quality week. The old rules still apply -- when uncertainty spikes, money flows to safety.

The Bottom Line

This is a risk-off week. The crypto meltdown is the headline, but it's part of a broader pattern. When jobless claims spike, tech earnings disappoint, and government shutdowns delay key data, traders get nervous. Gold benefits. Risk assets suffer.

For traders, the playbook is straightforward: don't fight the trend. If you're in risk assets, manage your exposure. If you're looking for entries, wait for the dust to settle. The jobs report on February 11 will give us more clarity on the labor market.

How are you positioned through this volatility? What's your take on the crypto crash -- buying opportunity or start of something worse?

TGIF! Have a good weekend!

-- Fi
"In markets, the crowd is often right -- until suddenly it isn't."

Happy Friday, traders!

CPI day -- and for once, the numbers are actually encouraging. January inflation came in lighter than expected, the jobs report from Tuesday beat estimates by a mile, and the labor market is quietly improving. Let's break it all down.

The CPI Drop -- 2.4% and Falling



Chart 1 shows the trend. Headline CPI dropped to 2.4% year-over-year in January, down from 2.7% in December. Core CPI slipped to 2.5% from 2.6%. Both are moving in the right direction, and we're closer to the Fed's 2% target than we've been in three years.

Month-over-month, all items rose just 0.2%. But before you pop champagne, the BLS flagged something important -- the government shutdown last fall disrupted data collection from October through January, which may be adding a downward bias to these readings. Fresh data won't fully replace the gaps until spring.

The Category Breakdown -- Where It Hurts, Where It Helps



Chart 2 is the monthly breakdown. Energy dropped 1.5% -- great for consumers, not great for crude traders. Food rose 0.2%, shelter rose 0.2%, core rose 0.3%. But the outlier? Airline fares jumped 6.5% in a single month. If you're flying somewhere, your wallet already knows inflation isn't dead everywhere.

Coffee and beef remain especially elevated on an annual basis, pushing food 2.9% higher year-over-year. For anyone tracking grocery receipts, that tracks.

The Jobs Surprise



Chart 4 tells a different story from the doom-and-gloom narrative. Tuesday's jobs report showed 130,000 nonfarm payrolls added in January -- more than double the 55,000 consensus. This is the best month for job creation since December 2024, after a year where gains averaged just 15,000 per month.

Healthcare drove the bus with 82,000 jobs added. Construction added 33,000. The unemployment rate edged down to 4.3% from 4.4%. Prior months were revised lower -- November down 15K, December down 2K -- but the January number more than compensates.

Unemployment -- Quietly Improving



Chart 3 shows the unemployment rate ticking down after holding at 4.4% for four straight months. At 4.3%, we're still above the 3.4% lows of early 2023, but the direction matters. The labor market isn't falling apart -- it's stabilizing.

Shelter -- The Last Stubborn Holdout



Chart 5 shows shelter CPI finally hitting 3.0% year-over-year, down from 5.7% in early 2024. It's grinding lower, but it's still 50% above the pre-pandemic norm. Shelter is the single biggest weight in the CPI basket, which is why headline inflation keeps undershooting the core reading when shelter cooperates.

For the Fed, shelter disinflation is the key to sustainably hitting 2%. The research on shelter lag effects suggests the private-market rent data (which has already normalized) takes 12-18 months to fully flow into CPI. We should see 2.5% shelter CPI by mid-year if the trend holds.

The Fed's Position



Chart 6 maps the rate path. The Fed has been on hold at 3.50-3.75% since last March after cutting 175 basis points from September 2024 through March 2025. Today's CPI print gives the doves ammunition -- 2.4% headline is getting close to target, and core at 2.5% isn't far behind.

Markets are pricing at least one more 25bp cut this year, likely starting in June, though another in September remains possible if inflation continues trending lower. But the strong jobs report complicates things. The Fed doesn't want to cut into a strengthening labor market with inflation still above target. Powell will want to see 2-3 more months of data like this before committing.

Weekly Claims -- Storm Fading



Chart 7 shows initial claims fell to 227,000 for the week ending February 7, down from 232,000 the prior week. The winter storm spike from late January is fading, which is exactly what the research on weather-related claims predicts -- 2-3 week normalization. The 4-week moving average remains healthy.

Crude Oil Traders

WTI is grinding around $62.80 today. Energy CPI dropped 1.5% in January, which means consumer gas prices are easing -- that's deflationary pressure. But geopolitical tensions (Iran, Red Sea) are providing a floor. Watch the $60 support and $65 resistance. The CPI data doesn't change the crude picture much -- supply dynamics and geopolitics are still driving this market.

Gold Traders

Gold pulled back to $4,960 after trading above $5,070 yesterday. The CPI print is actually bearish for gold in the short term -- lower inflation means less urgency for the safe-haven bid. But the 10-year yield sitting at 4.12% provides some offset. Gold traders should watch whether $4,900 holds as support. The longer-term thesis (central bank buying, geopolitical hedging) remains intact.

E-Mini S&P 500 Traders

ES is hovering around 6,843, down modestly on the week. The CPI print is a mild positive -- lower inflation supports risk assets. But the strong jobs report is a headwind for rate cut expectations. This push-pull dynamic explains why ES has been consolidating near 6,850 rather than pushing toward 7,000. The 6,800 support and 6,900 resistance levels define the near-term range.

Treasury and Bond Traders



Chart 8 shows the 10-year at 4.12% following today's CPI print. Duration bulls like this number -- we've been grinding below the 4.15% level that held for weeks. If we can sustain below 4.10%, the next target is 4.0%. But the strong NFP number and the government shutdown data caveat both argue against getting too aggressive on the long side.

Crypto Traders

Bitcoin is trading around $66,400, still nursing wounds from the crash off the October peak near $126,000. Today's CPI is modestly positive for risk assets, but BTC options expiring today add volatility. The $65,000 support level is critical -- a break below could trigger another leg down. The macro setup (falling inflation, potential rate cuts) is constructive for crypto longer-term, but the technical damage from the crash needs time to heal.

The CPI vs Components Dashboard



Chart 10 compares December 2025 to January 2026 across major CPI components. The pattern is clear -- broad disinflation across most categories, with food being the exception (rising from 2.5% to 2.9% YoY). Energy went deeper negative. Services are easing. This is the kind of broad-based cooling the Fed wants to see.

The Weekly Dashboard



Chart 9 summarizes the cross-asset picture. ES slightly negative, gold sharply lower this week on the inflation relief trade, crude grinding, Bitcoin bouncing modestly. The theme this week is "good news is complicated" -- lower inflation is great for consumers but reduces the urgency for rate cuts, which creates mixed signals for traders.

The Bottom Line

This is a CPI-day Friday with genuinely encouraging data. Inflation at 2.4% is the lowest since early 2021. The labor market beat expectations. Claims are normalizing. But the data collection gaps from the shutdown mean we should hold some skepticism on the magnitude of improvement.

For traders, the playbook: range-bound is the name of the game until the Fed signals definitively. Gold got punished for lower inflation, crude is stuck in its geopolitical range, and ES is consolidating near 6,850 waiting for a catalyst. The next big data point is PPI on Thursday the 20th.

How are you reading today's CPI? Does 2.4% change your Fed cut expectations, or is the shutdown data bias making you discount it?

TGIF! Have a good weekend!

-- Fi
"The data never lies, but sometimes it whispers instead of shouts."

Week of February 20, 2026: GDP Slams the Brakes -- Q4 Comes in at 1.4%, Half of What Wall Street Expected

The week's headline number isn't close. Q4 2025 GDP came in at 1.4% annualized -- consensus was 2.8%. The economy delivered literally half of what the street expected. Coming off Q3's blistering 4.4% pace, this is the sharpest single-quarter deceleration since the pandemic recovery. And the FOMC minutes released Wednesday showed officials split on where rates go next, with several members openly discussing the possibility of rate hikes. Let's break down what happened and why it matters for every market you trade.



The GDP Report: What Broke

Consumer spending and business investment still contributed positively, but everything else turned negative. Government spending contracted, exports declined, and inventory drawdowns subtracted from growth. The BEA noted this report was delayed from its original January 29 date due to the October-November government shutdown, so some data had to be imputed.



Real final sales to private domestic purchasers -- the clearest read on underlying demand -- rose 2.4%, down from 2.9% in Q3. That's not recessionary, but the trajectory is unmistakably lower. The gross domestic purchases price index jumped to 3.7% from 3.4%, meaning the economy is slowing while prices are accelerating. That's the textbook definition of a stagflationary signal.

The Fed's Dilemma: Growth Stalls, Inflation Sticks

PCE inflation for Q4 came in at 2.9% headline, 2.7% core. Both are above the 2% target -- and the trend line isn't cooperating.



Wednesday's FOMC minutes from the January 27-28 meeting confirmed the Fed held rates at 3.50-3.75% on a 10-2 vote (Waller and one other dissented). The real shock: several officials explicitly discussed scenarios where rates might need to go back up. Bloomberg's headline -- "Fed Reveals Surprise Shift as Several Officials Ponder Hike" -- tells you everything about how the market digested this.





Chart 8 lays out the Fed's dilemma clearly: growth is falling while inflation stays elevated. That's the worst possible combination for a central bank that needs both to cooperate.

Other Key Data This Week

Retail Sales (Tuesday) -- January came in up 0.2% MoM (ex-auto, ex-gas), with year-over-year growth at 5.72%. Fourth straight monthly gain, but a big step down from December's 1.26% MoM jump. Consumers are still spending, just more cautiously.

Industrial Production (Wednesday) -- Jumped 0.7% in January, beating expectations of 0.4%. Utilities surged (harsh January weather drove energy demand), and total IP hit 102.6 on the index. Manufacturing was essentially flat at 95.1.



Housing Starts (Wednesday) -- December data showed 1.404M units (SAAR), up 6.2% from November's 1.322M. Strongest reading since early 2025. Builders are responding to persistent housing demand despite elevated mortgage rates.



What This Means by Market

E-Mini S&P 500 Traders -- GDP at 1.4% with inflation running hot is the opposite of what equity bulls need. The risk is that the market has to reprice the "soft landing" narrative back toward "no landing" or worse. Watch the 6,000 level on ES -- it's been the line in the sand all February. If Q1 2026 data doesn't reaccelerate, the earnings multiple will need to compress. The bright spot: private domestic demand at 2.4% says the consumer isn't dead yet.

Crude Oil Traders -- The GDP miss matters because slower growth = weaker demand expectations. But IP jumping 0.7% (especially manufacturing-adjacent energy demand) tells a different story for near-term consumption. Crude inventories (WCESTUS1) are the series to watch next week. The GDP slowdown could pressure WTI toward the low $70s if demand fears build, but the industrial production beat and harsh winter energy demand provide a floor.

Treasury/Bond Traders -- This is your week. The 10-year is caught between opposing forces: GDP weakness argues for lower yields, but PCE at 2.9% and FOMC members talking about potential hikes pushes yields higher. The 10Y-2Y spread has been normalizing, and this data probably keeps it range-bound. Key level: 4.50% on the 10-year. A break above that means the market believes the Fed isn't done. A break below 4.25% means recession fears are winning.

Options Traders -- The GDP miss plus hawkish FOMC minutes should keep implied vol elevated. When growth slows and the Fed gets hawkish simultaneously, correlation structures break down and hedging gets expensive. VIX above 20 is the signal that options markets are pricing real uncertainty. Consider calendar spreads -- near-term vol is likely overstated relative to 30-60 day vol once the GDP shock gets digested.

Cryptocurrency Traders -- The stagflation signal (slow growth + sticky inflation) has historically been mixed for BTC. Dollar strength from hawkish Fed minutes is a headwind, but M2 money supply (M2SL) has been creeping higher again, and the "inflation hedge" narrative gets oxygen when PCE prints above target. Watch the Fed balance sheet (WALCL) for any hint of QT tapering -- that's the real fuel for crypto liquidity.

Economic Health Check: Consumer Stress Indicators

Beyond the headlines, traders need to watch the consumer stress signals brewing underneath:

The personal savings rate (PSAVERT) has been hovering around 4.5%, well below pre-pandemic norms of 7-8%. Consumer credit outstanding keeps climbing, and credit card delinquency rates (DRCCLACBS) ticked up to 3.1% in Q3 2025 -- the highest since 2012. That's not crisis territory, but the trend is concerning when paired with slowing GDP growth. If consumers are spending on credit while GDP decelerates, the runway for "resilient consumer" gets shorter.

Mortgage delinquencies remain low (around 1.8%), which is the good news. Housing starts bouncing back to 1.4M units also signals builder confidence. But the 30-year fixed mortgage rate sitting above 6.8% is a drag on refinancing and home equity extraction -- two traditional consumer spending engines.



Chart 7 pulls together the week's key metrics in one dashboard. The takeaway: growth is decelerating, the Fed is uncertain, and inflation remains sticky.

The Bottom Line

Q4 GDP at 1.4% vs expectations of 2.8% is the kind of miss that reshapes narratives. Three months ago, the story was "goldilocks economy, steady rate cuts ahead." Today it's "can the Fed cut at all with PCE at 2.9%?" The answer probably depends on Q1 2026 data, and traders should position for higher volatility until the picture clears.

Next week brings durable goods orders (Feb 23), and personal income/outlays data later in the month. Both will either confirm or challenge the stagflation signal from this GDP report.

-- Fi
"The market can stay irrational longer than you can stay solvent, but the data can't lie forever."

Week of February 27, 2026: The 10-Year Breaks Below 4%, Gold Tests $5,200, and Crude Drops to $65 -- Markets Are Picking Sides on the Stagflation Debate

One week after that ugly Q4 GDP print (1.4% vs 2.8% expected), the bond market is making its bet. The 10-year Treasury yield broke below 4% for the first time since late November -- falling to 3.98% as of this morning. That's not a small move. The last time yields were this low, the market still believed the Fed was going to cut aggressively. Now? The picture is a lot more complicated. Let's dig into what the data is telling us this week.



The CPI-PCE Divergence: Which Inflation Measure Is Right?

Here's what's driving the confusion in rate markets. January CPI came in at 2.4% year-over-year -- the lowest since September. That's a full 30 basis points below December's 2.7%. Shelter CPI is moderating. Energy fell 1.5% in January. Used cars and motor vehicle insurance declined. The headline tells a disinflation story.

But PCE -- the Fed's preferred measure -- told a very different story for December: 2.9% headline, 3.0% core. Both running hot. Both above target. The 50 basis point gap between CPI (2.4%) and PCE (2.9%) is one of the widest divergences in recent memory, and it matters enormously because the Fed watches PCE, not CPI. January PCE data won't drop until March 13.

Chart 1 lays this out. The red line (CPI) is bending lower while the blue line (PCE) remains stubbornly elevated. If you're trading off CPI, the disinflation narrative is intact. If you're trading off PCE, inflation is still a problem. The Fed is trading off PCE.

The Bond Market Makes Its Move



The 10-year yield broke below 4.00% this week -- that's the biggest deal in fixed income since November. Chart 2 shows the trajectory: from 4.19% on January 2nd to 3.98% today. That's 21 basis points in less than two months, accelerating sharply after the GDP miss last Thursday.

The bond market is saying: growth concerns now outweigh inflation fears. That's a significant call, especially with PCE running at 2.9%. Traders are pricing in at least two more Fed cuts this year, despite some FOMC members openly discussing rate hikes just last week.

Key level: 3.90% is the next major support on the 10-year. A sustained break there would signal the bond market is pricing in actual recession risk, not just slowdown.

GDP: The Aftermath of a 50% Miss



Last week's Q4 GDP at 1.4% (vs 2.8% expected) continues to reverberate. Chart 3 shows the dramatic arc: from 4.4% in Q3 to 1.4% in Q4. That's a 3-percentage-point deceleration in a single quarter, the sharpest since the pandemic recovery.

The GDP second estimate was supposed to drop February 26, but got pushed to March 13 due to insufficient source data (still dealing with the government shutdown data gaps). When it arrives, watch whether it gets revised up or down. Most analysts expect a slight upward revision to around 1.6-1.8%, but even 2% wouldn't change the narrative.

Federal government spending contracted 16.6% in Q4 due to the shutdown, accounting for over a full percentage point of the GDP drag. Without this self-inflicted wound, growth would have been closer to 2.5%.

Consumer Stress: Savings Rate Hits 3.6%



This is the chart that should concern every trader thinking about the second half of 2026. The personal savings rate dropped to 3.6% in December -- roughly half of the 7-8% pre-pandemic norm. Chart 4 shows the relentless decline through 2025.

Consumers are spending, but they're spending by drawing down savings and taking on debt. PCE rose 0.4% month-over-month in December while real PCE (inflation-adjusted) only rose 0.1%. Translation: consumers are spending more dollars but getting less stuff. That's the inflation tax in action.

With credit card delinquency rates at 3.1% (highest since 2012) and the savings rate at levels not seen since 2007-2008, the "resilient consumer" narrative has a ticking clock on it.

Labor Market: Still the Bright Spot



Initial jobless claims came in at 212,000 for the week ending February 21 -- up 4,000 from the prior week but below the 215,000 consensus. Continuing claims dropped 31,000 to 1,833,000, among the lowest readings in 10 months.

Chart 5 shows the picture: claims remain well below the 220K four-week moving average. This is the one data point keeping the recession bears in check. The labor market isn't cracking -- it's just not generating the kind of hiring momentum that would justify higher wage growth.

The Stagflation Quadrant Map



Chart 6 is the one that should frame every trading decision for the next month. It plots GDP growth against PCE inflation for each quarter since Q1 2024. Q4 2025 sits firmly in the danger zone: 1.4% GDP growth with 2.9% PCE inflation. The Fed can't cut aggressively because inflation is above target. They can't hold rates steady because growth is stalling.

What This Means by Market

E-Mini S&P 500 Traders -- ES sitting around 6,905 after this week's bounce. The 10-year breaking below 4% is bullish for duration-sensitive growth stocks, but the stagflation signal is a headwind. Watch March 13 (GDP revision + January PCE + durable goods) -- that's the next binary event.

Crude Oil Traders -- WTI dropped to $65.65, heading for a weekly decline as US-Iran nuclear talks made "significant progress" in Geneva. OPEC+ meets Sunday. Key support: $64.50 on the 20-day EMA. Resistance: $67. A break above $67 shifts the structure higher.

Gold Traders -- Gold testing $5,200, up over 1.5% this week. Real yields dropping from 1.98% to 1.72% is rocket fuel. If gold closes above $5,200, $5,307 and $5,448 are next. Support at $5,046.

Treasury/Bond Traders -- 10Y at 3.98% is the lowest since late November. Next stop: 3.90%. A break below opens 3.75%, fully pricing in recession.

Options Traders -- VIX at 19.39. Calendar spreads: sell near-term vol, buy March 13 expiry vol. Straddles on TLT around the March 13 date are another play.

Cryptocurrency Traders -- BTC around $67,700, down ~29% from January highs. Falling real yields are traditionally supportive, but BTC is trading as risk-off, not gold alternative. M2 money supply trends remain the longer-term catalyst.





Looking Ahead: March 13 Is the Next Big Day

March 13 brings three simultaneous releases: GDP Second Estimate, January PCE, and January Durable Goods. If January PCE tracks CPI lower, the Fed has room to cut and bulls get their green light. If PCE stays sticky, the stagflation trade accelerates.

How are you positioning for the March 13 data dump? Are you buying the bond rally or fading it?

TGIF! Have a good weekend!

-- Fi
"In a stagflationary world, the bond market always has the last word -- and right now it's saying growth matters more than inflation."

Week of March 6, 2026: The Economy Just Shed 92K Jobs While Oil Rips to $85 -- Welcome to the Worst-Case Scenario

Happy Friday -- and I don't say that lightly. The February jobs report just dropped an hour and a half ago and it's ugly. Nonfarm payrolls came in at -92,000. Not +92K. Negative. The consensus was +59K. The economy didn't just miss -- it reversed course entirely. Pair that with WTI crude sitting at $85 after a 26% weekly surge from the Middle East crisis, and the stagflation scenario we've been tracking since January just went from "plausible risk" to "happening right now."

The Jobs Report: -92K and Ugly Revisions



Chart 1 tells the story. February nonfarm payrolls came in at -92,000 -- the worst print since October 2025 (when the government shutdown skewed the data). But here's what makes this worse: the revisions. December was revised down by 65K, from +48K to -17K. January was revised down by 4K to +126K. Combined, December and January are 69K lower than previously reported. December is now officially negative.

The damage was broad:

• Healthcare: -28K (physician office strikes dragged this down by 37K)
• Manufacturing: -12K
• Transportation/warehousing: -11K
• Information: -11K
• Federal government: -10K (ongoing contraction from DOGE cuts)
• Construction: -11K

The only bright spot? Social assistance added 9K. That's it.

This isn't a one-month blip. Payroll employment has changed "little on net" for all of 2025. The labor market isn't cracking suddenly -- it's been slowly deteriorating for months, and the revisions are now confirming what the real-time data missed.

The Oil Shock: Strait of Hormuz and $85 Crude



Chart 2 shows the move that's reshaping every asset class. WTI crude surged from $58 two weeks ago to $85 today -- a 26% weekly gain, the largest since 2022. Brent is pushing $88.

The catalyst: US and Israeli strikes on Iran beginning February 28 triggered Iranian retaliation across multiple Gulf states. Iran's Revolutionary Guards claimed the Strait of Hormuz is closed, threatening to "set ablaze" any vessel that passes through. CENTCOM says the strait is still technically open, but insurance war risk premiums have surged and tanker traffic is disrupted.

Qatar's Energy Minister warned oil could hit $150 a barrel. The US Defense Secretary is talking about a 4-5 week campaign. Fed Governor Waller said people will see a spike in gas prices but argued it won't cause "sustained inflation" -- the market isn't buying that.

Key levels on WTI: $85 is the 52-week high zone. A sustained break above $90 opens $100. Support at $75 if diplomatic progress surfaces.

The Stagflation Trap: It's No Longer Theoretical



Chart 4 is the one that should frame every position you put on for the next month. Q4 2025 GDP came in at 1.4% with PCE inflation at 2.9% -- already deep in the stagflation quadrant. Now add -92K jobs AND $85 crude oil to that picture.

The Fed is trapped. They can't cut aggressively because oil is about to reignite inflation. They can't hold rates steady because the labor market is contracting. And they definitely can't hike because GDP is barely growing.

Treasury Yields: The Tug-of-War



The 10-year yield tells you exactly how confused the bond market is. It hit a 2026 low of 3.961% on February 27 when the growth scare dominated. Then it bounced back to 4.056% as oil-driven inflation fears took over. Right now it's oscillating around 4.04%.

The bond market can't decide which threat is worse: recession or inflation. That indecision IS the trade signal -- expect violent moves in both directions around every data release. The March 13 GDP revision + January PCE data dump will be the next catalyst.

Jobless Claims: The Divergence That Matters



Here's what's genuinely puzzling. Initial claims came in at 213K this week -- below the 220K warning level for the 15th straight week. Continuing claims ticked up to 1.868M but nothing alarming. ADP showed only +63K for February.

So claims say the labor market is fine. NFP says it's contracting. This divergence is massive, and Chart 5 shows it. The resolution will determine whether we're in a genuine labor market downturn or whether the February NFP was distorted by healthcare strikes and seasonal noise.

My read: claims track layoffs (companies aren't firing people en masse), while NFP tracks hiring (companies have stopped hiring entirely). Both can be true simultaneously, and that's actually the more dangerous scenario -- a labor market that freezes rather than cracks.

The Inflation Pipeline: Oil Shock Meets CPI



Chart 6 is why the oil shock matters beyond crude oil traders. CPI had been falling -- January came in at 2.4% year-over-year, the lowest since September. Energy CPI had been a deflationary force. That's over.

The research on oil-to-CPI transmission shows a 2-3 month lag. If crude stays above $80, expect February and March CPI to reverse course. The March 11 CPI release (next Wednesday) will still reflect pre-crisis energy prices. But April's release? That's where the damage shows up.

For traders, the critical question is simple: does the Fed look through this oil shock as "transitory" (like Waller suggested), or does it force them to stay on hold even as the economy deteriorates?

What This Means by Market

E-Mini S&P 500 Traders -- ES futures around 6,750 in pre-market, down 1.25% on the jobs miss. The combination of -92K NFP and $85 oil is the worst possible backdrop -- growth slowing while input costs surge. Watch 6,700 as near-term support. A break below opens 6,550 (the February low). Upside capped at 6,880 without a diplomatic breakthrough on Iran.

Crude Oil Traders -- WTI at $85.02, up ~26% for the week. This is entirely geopolitical premium -- fundamentals didn't change. If Hormuz reopens, expect a $15-20 pullback within days. If the conflict escalates, $100+ is in play. Position sizing is everything here -- these are not normal moves. Key resistance: $87 (Brent parity). Support: $75 on de-escalation, $68 on full resolution.

Gold Traders -- Gold around $5,090, surprisingly subdued given the chaos. The problem is the dollar rallying on safe-haven flows, creating a headwind. But the fundamental case is overwhelming: negative real yields, geopolitical risk, stagflation. If gold breaks above $5,200 (last week's high), $5,400 is the next target. Support at $4,950.

Treasury/Bond Traders -- 10Y caught between growth fears (bullish for bonds) and oil inflation (bearish for bonds). The tug-of-war will resolve around 3.90% or 4.15%. If the -92K NFP print is confirmed by next month's data, 3.75% is in play. If oil pushes CPI higher, 4.20%+ comes back. Duration is a coin flip right now -- consider curve trades instead.

Options Traders -- VIX near 23 and likely heading higher. The combination of geopolitical uncertainty + macro deterioration + upcoming data (March 11 CPI, March 13 GDP/PCE) creates a vol buyer's paradise. Straddles on XLE and USO for direct oil vol exposure. Calendar spreads on SPY selling near-term, buying March 13 expiry.

Cryptocurrency Traders -- BTC around $69,000, down from $72,600 yesterday. Despite the "digital gold" narrative, Bitcoin continues to trade as risk-off, not safe-haven. The correlation with equities remains strong. M2 money supply is the longer-term catalyst, but in the near term, BTC goes where ES goes. Support at $65K, resistance at $73K.



The Bottom Line

This is the week the stagflation scenario became reality. -92K jobs. $85 oil. GDP at 1.4%. PCE at 2.9%. The Fed has no good options, and every asset class is repricing simultaneously.

The next critical dates: March 11 (February CPI), March 13 (GDP second estimate + January PCE + durable goods), and March 18-19 (FOMC meeting). That's three potential inflection points in 13 days. Size positions accordingly.

Two-scenario framework for the next two weeks:

• Scenario A (Diplomacy wins): Iran talks produce ceasefire, oil drops $15-20, bonds rally, equities recover, gold pulls back. Probability: 35%.
• Scenario B (Conflict deepens): Hormuz stays disrupted, oil pushes toward $100, stagflation trade accelerates -- long gold, short equities, curve steepeners. Probability: 65%.

How are you positioning for the double whammy -- oil shock AND jobs collapse? Are you hedging or riding the momentum?

TGIF! Have a good weekend!

-- Fi

"When the labor market and the oil market send you opposite signals on the same morning, the only certainty is volatility."

Fi 

The Stagflation Trap: It's No Longer Theoretical

Gut feeling is we slow down slowly mid year then all at once in Q4. We overcorrect into "overheating" zone in Q2 2027 and repeat the cycle until late 2028/early 2029