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Jobs Report, Oil Surge Leave Fed Gritting Its Teeth

  • The Federal Reserve faces a dilemma between cutting rates to protect jobs and risking higher inflation, which has been above its 2% goal for five years.
  • The February jobs report showed a loss of 92,000 jobs and a 4.4% unemployment rate, intensifying the Federal Reserve’s policy dilemma.
  • The jobs report coincided with new inflation threats from the U.S.-Israel military campaign in Iran, closing key global shipping lanes.

 
Is Inflation Cooling or Stubbornly High? Both Can Be True.

  • Two key inflation measures are telling opposite stories about where inflation is headed.
  • The 12-month CPI was 2.4% in January, while the Fed’s preferred PCE was 2.9% in December, above its 2% target.
  • The gap between CPI and PCE is largely due to differing weights for housing and healthcare.
Boston Fed President Collins Argues for Holding Rates Steady

  • Boston Fed President Susan Collins stated the central bank should maintain current interest rates for some time.
  • Collins said that although considerable economic uncertainty remains, her baseline outlook is fairly benign.
  • Collins is not a voting member of the Federal Open Market Committee this year.
How War in Iran Is Colliding With Trump’s Economic Priorities

  • The war with Iran is causing domestic economic challenges for President Trump, including rising gasoline prices and market instability, ahead of the 2026 midterm elections.
  • The attacks on Iran also halted a U.S. government bond rally, pushing up the 10-year Treasury note yield.
  • A sustained war throughout the Middle East could deepen the disruption, either by stoking inflation or raising anxieties that could damp consumer spending and slow economic growth.
U.S. Jobless Claims Were Unchanged Last Week

  • U.S. jobless claims held steady at 213,000 in the week through Feb. 28, indicating employers are retaining staff.
  • Continuing jobless claims rose to 1.87 million in the week through Feb. 21, up from 1.82 million a week earlier.
  • ADP’s monthly report showed the economy added 63,000 jobs last month, following a revised 11,000 in January.
China Consumer Inflation Beats Expectations on Holiday Boost

  • China’s consumer-price index rose 1.3% in February from a year earlier, exceeding expectations and marking the highest reading in nearly three years.
  • China’s producer-price index dropped 0.9% in February, remaining in deflation for over three years, though economists question sustained easing.
  • Chinese authorities set a conservative GDP growth target of 4.5% to 5% for this year, with reduced fiscal support for consumption.
Germany’s Industrial Rebound Stumbles as Orders, Production Fall

  • German manufacturing orders plunged 11.1% in January 2026, exceeding economists’ expectations for a smaller drop.
  • German industrial production also fell 0.5% in January, following a 1.0% decline in December, Destatis said.
  • The country’s industrial sector faces an uncertain outlook due to weak global demand, Chinese competition, and higher energy costs.
U.S. Loses 92,000 Jobs in Widespread and Unexpected Downturn

  • The U.S. lost 92,000 jobs in February, missing expectations and showing a struggling labor market.
  • The job losses increase expectations for Federal Reserve rate cuts, amid re-emerging inflation risks.
  • An annual update showed 1.4 million fewer people employed as of December due to immigration changes.
U.S. Retail Sales Sagged in January

  • The Commerce Department reported a 0.2% decline in retail sales in January, extending a tepid trend for U.S. shopping.
  • A 0.9% decline in sales at motor-vehicle and parts dealers weighed on the overall figure, though other categories rose.
  • Separately, a dismal February jobs report showed the economy shed over 90,000 jobs, and the unemployment rate rose to 4.4%.
Eurozone Fourth-Quarter Growth Revised Lower, Dragged by Irish Contraction

  • Eurozone economic growth in Q4 last year was revised down to 0.2% from 0.3% due to a larger contraction in Ireland.
  • Ireland’s economy contracted 3.8% in Q4, exceeding the 0.6% decline estimated in February; its GDP is volatile.
  • Irish GDP for all of 2025 was 12.3% higher than in 2024, while eurozone GDP grew 1.5% in 2025.
SEC Dismisses Fraud Case Against Crypto Billionaire Justin Sun

  • The Securities and Exchange Commission moved to dismiss a civil fraud lawsuit against crypto billionaire Justin Sun.
  • A company affiliated with Sun agreed to pay a $10 million fine to resolve allegations of market manipulation for a crypto asset.
  • Sun became a major investor in President Trump’s crypto projects as he pursued leniency from U.S. law enforcers.
Regulators Need to Play Catch-Up on Private-Credit Risk, Canada Central Banker Says

  • Bank of Canada Gov. Tiff Macklem urged global authorities to increase surveillance of nonbank lenders like hedge funds and institutional investors.
  • Macklem cited hedge funds as notable buyers of government debt, often financed with short-term repo agreements, posing risks to sovereign debt markets.
  • Macklem also highlighted the growth of opaque private credit, which falls outside global banking regulators’ purview and could cause cross-border spillovers.
Kraken Becomes First Crypto Firm to Win Access to Fed’s Core Payments System

  • Kraken Financial, a banking unit, gained access to the Federal Reserve’s core payment systems, a first for a crypto firm.
  • The approval provides Kraken Financial direct access to Fedwire, a critical interbank payment system, for faster transactions.
  • President Trump has installed crypto-friendly regulators and pushed for legislation, improving the industry’s prospects.
Kalshi Fines Former Gubernatorial Candidate, MrBeast Employee on Prediction Wagers

  • Prediction-market platform Kalshi publicly disclosed its first disciplinary actions, fining a candidate and a MrBeast editor.
  • Kalshi fined former California gubernatorial candidate Kyle Langford $2,246.36 and banned him for five years.
  • Kalshi fined MrBeast video editor Artem Kaptur $20,397.58 and suspended his account for two years.
 

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