1. Inflation Bites Back — PPI Blows Up the Fed Cut Trade
January U.S. PPI just hit and it’s ugly. Headline 0.5% MoM — nearly double the 0.3% expected. That’s tariffs feeding into the pipelines?
10-year Treasury yields drop below 4.0% — this is interesting.
Canada 2025 GDP: 1.7% real growth — slowest since 2020. Bank of Canada has cover to cut now? Fed does not. Divergence is widening a little here. Worth watching.
2. Everyone Worried About AI Now?
Everyone is scared about AI now and selling stocks.
I have been using some AI tools recently, and I can tell you: a lot of jobs are going to become very obsolete very quickly. I am not a tech expert, but the power of tools coming out is just impressive.
But! Maybe the fear is overblown in the near-term. Change takes time. Let’s see.
3. Gold Holds, Oil Heavy, Silver To all-time highs?
Gold holding well above $5,200 — hot PPI numbers also gave it a boost + geopolitics providing support too.
Silver around $93 now, this is big. Don’t take it lightly. It’s out of the range, so the all-time highs next?
Oil – war premium remains. In case of a war, do not be shocked to see oil seeing wild move at the open on Sunday evening.
4. The Stagflation Trap — Fed Stuck Between Two Bad Options
Here’s something you shouldn’t overlook: tariffs are re-igniting wholesale inflation potentially while AI disruption fear is crushing growth expectations across software, logistics, and finance.
In simple terms: we may have concerns of rising price, and slowing growth. This is also known as Stagflation in economic terms.
Can the Fed cut into a 3.6% core PPI? But it also can’t ignore a softening economy/worsening job market.
Fed’s next meeting is around mid-March. Yields dropping now. War drums louder, economy softening, and inflation sticky… does the Fed hold again?
5. Dollar Weakens, CAD Catches A Bid, Bitcoin Still Can’t Find Buyers
Dollar Index — weakening a little with yields down.
CAD Jumps against the USD even with 1.7% GDP print.
Bitcoin is having hard time finding buyers — down 45% from its $126K peak. Coinbase lost $667M in Q4. Every bounce fails. $60,000 is the line. Below it gets very ugly very fast.
Oh, and a mortgage finance company (MFS) out in the U.K. became insolvent – bunch of banks have exposure to it.