Banking, payments services disrupted after Amazon UAE data centers hit in drone strikes

 Drone strikes on the Amazon Web Services data centers in the United Arab Emirates have caused a widespread outage across the apps, banking services, and financial platforms. AWS reported that two facilities in UAE and one in Bahrain were damaged from the events, leading to power disruptions that forced systems offline. Several companies that rely on AWS infrastructure have experienced service interruptions, including payment platforms Alaan and Hubby, and banks such as the Abu Dhabi Commercial Bank. 

The strike comes amid escalating tensions following the United States and Israeli attacks on Iran over the weekend. These events triggered retaliatory actions across the Middle East. While AWS continues to push for recovery efforts, the incident highlights how geopolitical conflict can disrupt digital infrastructure and services worldwide. 

Inflation Fears Rise as Manufacturing Costs Spike in February

In early March, data showed a surprising jump in manufacturing prices in the United States, raising concerns about inflation staying higher than expected. According to the February report from the Institute for Supply Management (ISM), the Prices Paid Index—a key measure of how much manufacturers are paying for raw materials—surged to a reading of 70.5, far above January’s level and economist forecasts. This indicates that factories are seeing significantly higher input costs, which can eventually trickle down to consumer prices and push inflation up. At the same time, the overall manufacturing sector still showed modest growth, but the rapidly rising costs have sparked uncertainty in markets and among policymakers. If inflation remains strong, the Federal Reserve might feel pressure to keep interest rates higher for longer, which could slow other parts of the economy like housing or investment.

https://markets.chroniclejournal.com/chroniclejournal/article/marketminute-2026-3-2-inflation-alarm-ism-manufacturing-prices-index-surges-to-705-as-tariffs-bite-into-second-month-of-growth

Is AI Really Boosting Overall Productivity in The Economy?

    Artificial intelligence is often talked about as the next big thing that will boost the U.S. economy. Productivity simply means how much workers produce per hour, and it is one of the main reasons wages and living standards rise over time. Recent data from the U.S. Bureau of Labor Statistics shows productivity has improved in the past year, but the increases have not been steady. While some companies are clearly using AI to work faster and cut costs, there is not yet clear proof that AI has permanently raised productivity across the whole economy.

If AI truly improves productivity in a lasting way, the economy could grow faster without causing inflation, which would be a major benefit. Groups like the International Monetary Fund and the McKinsey Global Institute say AI has the potential to increase output over time, but they also explain that big technological changes usually take years to fully show up in national data. For now, AI looks promising, but the large, long term productivity boom many investors expect has not clearly appeared in the numbers yet.

Sources:

U.S. Bureau of Labor Statistics – Labor Productivity and Costs
https://www.bls.gov/lpc/

McKinsey Global Institute – The Economic Potential of Generative AI
https://www.mckinsey.com/mgi/our-research/the-economic-potential-of-generative-ai-the-next-productivity-frontier

Iran Closes the Strait of Hormuz

Iran has closed the Strait of Hormuz, sending shockwaves across global energy markets. Many countries will be affected, but the most pain will be felt in Asian countries. The strait is vital for oil trade, with roughly 13 million barrels per day passing through it in 2025. Oil prices have already significantly increased, and this development could make matters worse. Some specific countries that will be affected are China, Japan, South Korea, and other countries in Southeast Asia. It's the expectation that they'll see inflation first, and shortages second. However, China has a good amount of reserves to weather the storm for a while, but the uncertainty around this circumstance could cause economic hardship for any country caught in the crossfire of this war.

https://www.cnbc.com/2026/03/03/strait-of-hormuz-closure-which-countries-will-be-hit-the-most.html 

Core whole sales prices increases by 0.8%, much more than expected.

       In January, there was hopes that the inflation would ease, however that was not the case. The PPI adjusted to a 0.8% after a gain of 0.6% in December. The headline PPI rose 0.5%, going above the forecast of 0.3% than in the prior month. During 2025, wholesale prices increases to 3.6%, which is beyond the Federal reserves 2% inflation goals. This tells us that inflation is still a factor in our economy. With regards to service prices, this is the main factor that drove the increase of wholesale prices, an 0.8% monthly rise was the highest since July of 2025. Goods fell by 0.3%, but core goods rose to 0.7%. 

        President Donald Trump believes inflation has been controlled. The pressures indicated by the PPI will cause the Fed to become cautious while weighing the pending moves on interest rates. Until the summer, the Fed will stay on the sidelines as expected by the market, though Trump has pushed for lower rates. However, economists are worried that Trump's tariffs will push for higher inflation, but is expected to be temporary by the Fed officials. 

https://www.cnbc.com/2026/02/27/ppi-january-2026-.html

Difficult Month for Amazon: Geopolitical Risk Meets Market Uncertainty

In two recent articles, we can see how the effects of uncertainty in the global economy has impacted Amazon. According to CNBC, Amazon has confirmed that drone strikes have damaged three Amazon Web Services (AWS) facilities in the UAE and Bahrain. Around a similar time, TipRanks reported that Amazon stock experienced its worst month since 2022. While these stories may seem separate, they both highlight the risk and uncertainties that large global companies are facing.

The CNBC article explains that these drone strikes impacted data centers in the Middle East that support cloud services in the region. AWS is one of Amazon’s most profitable streams of revenue and plays a huge role in powering businesses that rely on the cloud. Though the majority of updates from war in the Middle East regard oil concerns, the digital infrastructure is also being affected. With the world's economy becoming increasingly dependent on technology and data centers, disruptions to cloud services can have rippling effects across a multitude of industries.

Putting aside the damages of facilities in the Middle East, Amazon’s stock has struggled. According to TipRanks, investors are reacting with caution as Amazon increases their spending on AI and data center expansions. While they are investing into growth, it isn’t certain that these expansions will be sustainable. Having a period of aggressive expansion combined with geopolitical instability could explain why markets are acting nervous. That being said, Amazon is a fundamentally strong company so these issues should only affect them in the short-run.

https://www.cnbc.com/2026/03/02/amazon-says-drone-strikes-damaged-3-facilities-in-uae-and-bahrain.html
https://www.tipranks.com/news/amazon-stock-amzn-sees-its-worst-month-since-2022#google_vignette

What war with Iran means for prices and interest rates

 Last week military actions occurred in the Middle East. U.S. and allied carried out strikes in Iran. This ended up triggering reactions to interest rates and prices. Oil prices shot up and global stocks fell immediately. Economist say these actions won't affect the Federal reserve's upcoming interest rate decisions. Iran's supreme leader was killed in these attacks leading to a chain of events that affect more than just Iran. There has been a large backup of traffic in Iran, it is expected to lead to higher prices in gas for American consumers. It is said to been too early to really know what is going on. There shouldn't be a panic for gas but there not sure yet. Donald Trump said that this last for about 4-5 weeks. 

If the war does end up lasting a period of time American consumers may see skyrocketing energy costs that could push the U.S. economy towards stagflation. Stagflation occurs when inflation is high, slow or negative economic growth, and rising unemployment. This combination is very dangerous for the economy because the policy tools for inflation can worsen unemployment, and policies to reduce unemployment. The U.S. remains strong right now but there are warning signs that are occurring. Oil prices are rising; inflation is higher than the target. Higher gas prices could raise the cost of materials; this would lead to companies having to cut down on materials leading to missing out on more customers. These attacks have multiple impacts that go past military and physical attacks. It effects the economy in so many ways that are often looked past. All of these events have chain reactions that can affect everything.

How does war with Iran affect prices, interest rates, supply chains?

Inflation Progress Could Be Undone by The Middle East Conflict

 Recent comments from President Donald Trump declaring inflation “tamed” have been overshadowed by fresh concerns in global markets as tensions in the Middle East threaten to push prices higher once again. While U.S. inflation has eased from its recent peaks, conflict involving Iran is now spiking oil prices, raising the risk of renewed price pressures for consumers and complicating the Federal Reserve’s path forward. 

Economists caution that even if the immediate impact on U.S. inflation remains modest, sustained geopolitical instability could create “stagflationary” pressures, a combination of slowing growth and rising prices. That would make it harder for the Federal Reserve to justify cutting interest rates later this year, even as policymakers continue to watch inflation trends.

For consumers, the brewing crisis serves as a reminder that global events, particularly those tied to energy production and transport, still have a direct line to prices at the pump and on store shelves. What looks like progress on inflation one week can be threatened by geopolitical volatility the next.

https://www.cnbc.com/2026/03/02/as-trump-declares-inflation-tamed-iran-conflict-threatens-new-price-pressures.html

A Nine Nation War

The war between the U.S. and Iran has turned into a nine nation war. A conflict that began with a single strike has now pulled in the entire region, which includes Saudi Arabia, the UAE, and Kuwait. Also Western allies like the UK. Even the countries that are neutral are finding it impossible as drones and missiles cross into their airspace daily. Even more chaos when Kuwaiti air defenses accidentally shot down three U.S. fighter jets because of radar confusion during a Iranian missile barrage.

https://www.pbs.org/newshour/world/war-in-middle-east-widens-as-israeli-and-u-s-planes-pound-iran-and-tehran-and-its-proxies-hit-back 

Private Credit Fund Underperformance Suggests Potential Stock Market Volatility

Markets have had substantial concerns about the stability and security of private credit funds in recent months. 

Private credit funds are non-bank lenders that lend directly to companies, promising high rates of return to their investors and flexibility for their borrowers. 

Following several major private credit loans that have recently gone into default, markets have begun to question whether private credit firms are wisely allocating their capital. Details on private credit loans are often opaque, and if private credit firms begin experiencing extreme credit losses, their troubles can flow up to banks, as they often borrow from banks themselves, which can destabilize the larger financial system.

The State Street SPDR Blackstone Senior Loan ETF is currently down 4% YTD and is considered a bellwether for the overall performance of the stock market, because the fund has broad exposure to loans across many industries, company sizes, and investment grades, and if its borrowers underperform, the effect will trickle out to the rest of the economy, as described before. The fund often drops below its 200-day moving average before major corrections of the S&P500, and is currently trading 4.87% below the moving average, suggesting potential volatility in the wider stock market in the coming weeks.

Source: https://www.barrons.com/articles/private-credit-stocks-senior-loan-etf-27d5eee5?siteid=yhoof2 

Top earners are more afraid for their employment because of AI

In late February 2026, a new trend emerged in the U.S. labor market: higher-income workers are now expressing more fear about losing their jobs to artificial intelligence than lower-income workers, reversing the traditional employment anxiety patterns. According to recent surveys, confidence in the labor market among top earners has fallen to levels that have not seen since the late 1970s, with many pointing out the rise of AI as a key factor. 

Data from the University of Michigan Survey of Consumers shows that sentiment about future job prospects has deteriorated most sharply among the top third of earners, while lower-income workers reported relatively higher labor confidence. Similarly, the New York Federal Reserve’s monthly survey indicates that expectations of finding new employment within three months if displaced are near record lows for higher-income workers. 

Additionally, payroll processing firm ADP reports that turnover rates in traditionally white-collar occupations have plummeted to historic lows, suggesting that many higher-income professionals are choosing to stay in their current roles amid fears of AI-driven disruption. Despite these concerns, unemployment remains relatively low in high-skill sectors such as finance, indicating that the job market is still strong even as anxiety rises. 

https://www.cnbc.com/2026/02/25/top-earners-are-more-afraid-for-their-employment-than-lower-income-as-ai-threat-increases.html

How the Iran War Is Affecting the World Economy

 

How the Iran War Is Affecting the World Economy

The recent war involving Iran has already started to affect the global economy in big ways. One of the biggest impacts is on oil prices. Because Iran and other countries in the Middle East produce a lot of oil, fighting there makes traders nervous and pushes prices up. Right now, oil has jumped almost 8–10% and could go even higher if shipping routes like the Strait of Hormuz get blocked longer. Higher oil prices make everything that uses fuel more expensive, which can cause inflation in many countries. 

Stock markets have also dropped because investors are worried about the future. When war scares people, they often sell stocks and buy “safe” things like gold. This kind of volatility can slow economic growth because companies and consumers spend less when they’re uncertain. 

Inside Iran, the economy was already struggling before this war from sanctions and inflation, and now conflict just makes it worse by disrupting trade and energy sales. That could mean slower growth and tougher living conditions for regular people. 

Overall, the war is showing how connected today’s world economy is, a conflict in one region affects prices, markets, and growth almost everywhere.

Sources: The Guardian, Bloomberg, ing.com

Jamie Dimon says AI euphoria, record stocks and banks doing 'dumb things' could lead to another financial crisis.

 Jamie Dimon, the CEO of JPMorgan Chase, says that with our current financial situation and banks doing "dumb things" like taking on risky loans that could put the US in a similar market situation to how it was before the financial crisis of 2008. He said to investors that the conditions of the market, including the record levels, could be a cause for concern. He sights that he saw this same trend from 2005-2007, where everyone was making a lot of money and the sky was the limit just for it to crash back down. Dimon says that the recent concerns among investors about AI disrupting the software sector is a typical disruption in the past financial markets. He cited some previous "stable bets" such as newspapers and utility/phone companies that developed some problems, and said that this time it may be the software sector due to AI causing the industry to be challenged. 

https://www.cnn.com/2026/02/24/economy/jamie-dimon-warning 

Greenland’s Hidden Wealth: Treasure or Myth?

In an episode of The Indicator from Planet Money by NPR, hosts Darian Woods and Wailin Wong explore whether Greenland is truly an untapped land of riches by telling the story of geologist Greg Barnes, who discovered a large rare-earth mineral deposit that could help countries like the United States reduce reliance on China for critical materials used in technology and clean energy; this strategic importance even sparked political interest, including talk from Donald Trump about acquiring Greenland. However, the podcast explains that valuable minerals underground don’t automatically mean easy profits, because Greenland faces huge obstacles like extreme weather, limited roads and energy, environmental risks, and local opposition to mining projects, all of which make extraction expensive and slow. While Barnes’s project may eventually produce rare earth elements, experts say Greenland’s geology alone doesn’t guarantee economic success, showing that the idea of Greenland as a simple treasure trove is more myth than reality.

https://www.npr.org/transcripts/nx-s1-5683139

Are big companies staying private too long, and does that matter for the macroeconomy?

Are big companies staying private too long, and how does that affect the macroeconomy?

The question of whether firms are “staying private too long” goes beyond corporate governance, it is dependent on where capital formation occurs, who captures the returns, and how those choices shape the level and volatility of national income over the business cycle.

Typically, firms grow, then go public to raise capital, diversify ownership, and fund investment. Public equity markets are where household savings meet firm investment, and movements in those markets feed directly into national income, productivity, and the business cycle.

In practice, a growing share of this process now happens in private markets. Large, mature firms can raise substantial amounts of capital without listing. They rely on private equity, venture capital, sovereign wealth funds, and private credit. As a result, more capital formation and value creation occurs before any IPO, in venues that are less transparent and accessible to typical households.

This has three important macro channels.

The first is capital formation. Access to deep private capital allows firms to invest in long horizon projects with less pressure to meet quarterly earnings targets. Disclosure requirements are lighter and financing terms are more flexible, which can support higher and more patient investment in both physical and intangible capital. At the aggregate level, this can raise investment and the capital stock and support higher trend output. The open question is whether the opacity of private markets leads to efficient allocation of this capital or to misallocation that does not show up until later in the cycle.

The second channel is distributional. Participation in private markets is concentrated among institutions and high net worth investors. When the highest growth phase of a firm’s life happens while it is still private, most of the capital gains accrue to a relatively narrow segment of the population. By the time the firm reaches public markets, much of the explosive upside may already be realized. This reinforces wealth and income inequality and changes the path of aggregate consumption, since high wealth households have lower marginal propensities to consume and different portfolio choices than the median household.

The third channel is business cycle dynamics. Private capital can stabilize or amplify shocks. In expansions, abundant private funding can smooth temporary earnings declines and maintain investment when public markets might react sharply. In downturns, the same illiquidity and opacity can become a liability. A synchronized pullback by private investors can trigger a rapid contraction in funding for investment that is not immediately visible in public prices but still transmits to output, employment, and measured GDP.

Are Jack Dorsey’s aggressive job cuts the start of an AI jobs apocalypse? Economists weigh in (CNBC)

 A recent Are Jack Dorsey’s aggressive job cuts the start of an AI jobs apocalypse? Economists weigh in (CNBC)-themed discussion has reignited a broader debate about how artificial intelligence is reshaping work in the tech world. At the center of it is Block Inc., the fintech company led by CEO Jack Dorsey, which announced cuts of roughly 4,000 positions  almost half its workforce as part of a shift toward AI-driven operations rather than financial distress. Dorsey framed this move as proactive adaptation to a future where “intelligence tools have changed what it means to build and run a company,” a message echoed in the strong market reaction, with Block’s shares jumping sharply on the news.

Economists and industry observers are split on what this means for the broader job market. Some see Dorsey’s decision as one of the first high-profile instances of a major company explicitly attributing layoffs to AI efficiencies a potential harbinger of wider structural shifts in employment. Others caution that such rhetoric can sometimes mask traditional cost-cutting, or that technology historically both displaces and creates jobs in new areas. What’s clear is that the conversation about AI’s long-term impact on jobs whether it signals a looming “jobs apocalypse” or a transformative transition is only getting louder.

Venezuela’s Capital, Laid Low by Misrule, Is Stirring Back to Life

 It is heartbreaking to see how Caracas continues to struggle with such extreme economic inequality. While some areas show signs of recovery through dollarization, the reality for most people is still a constant battle against inflation and basic costs. It’s a stark reminder of how much global politics and shifting sanctions directly impact the daily lives of families just trying to get by.

https://www.nytimes.com/2026/02/26/world/americas/caracas-venezuela-economy.html

What will happen to gas prices with the strike on Iran

 Gas prices rising in recent days show how closely global energy markets are tied to politics around the world. Especially after President Trump decided to launch military strikes against Iran. According to reporting by USA Today, the attacks have increased uncertainty in oil markets, and investors fear potential disruptions in the Middle East. The Middle East is crucial to the global Oil supply and shipping routes. Even without an immediate interruption, the higher risk alone has pushed crude oil prices upward, and those increases tend to flow directly to consumers, resulting in higher gas prices. As a result of the bombings, Americans may end up seeing an increase in gas prices in the coming weeks. 

Will US attacks on Iran drive up gas prices? Here's what we know.

FIFA Raises Prize Money for 2026 World Cup as Soccer Revenue Grows

 FIFA has increased the prize money for the FIFA World Cup 2026. The total prize pool will be about $655 million, and the winning team could earn around $50 million, the highest ever. The 2026 tournament will be hosted mainly in the United States, along with Canada and Mexico. The tournament is expected to generate more than $10 billion in revenue across host nations, driving massive spending on infrastructure, tourism, and media rights and offering a big financial boost to local economies and national associations.  

 However, some teams and economists warn that rising costs and travel demands might outweigh gains for smaller football associations, showing that bigger prize pools don’t automatically mean more profit for all.  

https://www.reuters.com/article/soccer-worldcup-prizemoney-2026-idUSL1N3C22XY

What’s at Stake for Oil Markets as Trump Strikes Iran

 With the recent military strikes on Iran from the United States, there is a new risk to oil markets around the world. At the moment, it is not known if energy facilities were damaged, but Iran produces a little over 3 million barrels of oil per day, which translates to about 3 percent of the global supply. Since the damage has been done, the shipping route through the Straight of Hormuz has slowed down due to oil tankers avoiding it, causing crowding near the entrance and leading people to panic, believing the route is at risk of disruption. Current traders are monitoring whether there will be a real disruption to Iran's exports and whether the Straight of Hormuz could close, causing prices to increase significantly. 

US strikes against Iran could see oil prices jump!

 According to a recent report by Yahoo Finance, military strikes by the United States and Israel on Iran may cause oil prices to rise by $10 to $20 per barrel.

Oil prices tend to rise when there is conflict in the Middle East because the Middle East produces a large percentage of the world’s oil. Investors may be worried that the conflict may cause an interruption in the supply of oil, particularly near the Strait of Hormuz, which is an important waterway that carries most of the world’s oil.

If oil prices rise, gas prices may also rise in the United States. Higher gas prices may cause food prices and other prices to rise because transportation costs may be higher.

It remains to be seen if prices will continue to rise. If the situation calms down, oil prices may stabilize. If the situation gets worse, prices may continue to rise.

 https://finance.yahoo.com/news/us-strikes-against-iran-could-see-oil-prices-jump-10-to-20-or-more-with-no-deescalation-143847017.html

How could the U.S. strikes in Iran affect the world's oil supply?

 U.S. and Israeli strikes on Iran have raised concerns about potential disruptions to global oil markets, though the immediate impact on production and trade remains uncertain. Oil prices have already been climbing due to fears of conflict, even before markets reopen. Despite heavy sanctions, Iran still exports roughly 1.9 million barrels of oil per day, much of it to China via “shadow” tankers that evade restrictions. However, analysts note that China holds large strategic and commercial reserves, and the global market is currently oversupplied, which could cushion the blow if Iranian exports are reduced.

The greater risk lies in how Iran might retaliate. Iran controls the Strait of Hormuz, a critical chokepoint through which about 20% of global oil supply passes each day. If Iran were to disrupt or close the Strait, oil prices could spike dramatically and immediately. An even more severe scenario would involve Iran targeting oil facilities in neighboring Gulf countries such as Saudi Arabia, Kuwait, the UAE, or Qatar. While past flare-ups avoided direct attacks on energy infrastructure and kept oil flows steady, a broader regional escalation could have far more serious consequences for global energy markets and the wider economy.

https://www.npr.org/2026/02/28/nx-s1-5678603/iran-strikes-oil-energy-markets 

NYC Mayor Zohran Mamdani meets with President Trump over new affordable housing investment in New York

On Thursday, Mamdani met with Trump to discuss investment in a 21 million dollar housing project in queens desgined to build 12,000 homes near the busiest rail in the city.  New York, like many big cities are struggling with a housing crisis, due to the high demand and lack of rising supply of housing. Economically, this has been linked to the high regulatory cost of building affordable housing in cities like New York. An investment in affordable housing would benefit many struggling New York families, but it may cost more than estimated, and it is going to be hard to raise such funds. Apparently, although critical of Mamdani from the start, Trump seemed 'enthusiastic' about the project, and may be on board (perhaps due to the fake newspaper Mamdani's team created). It will be interesting to see if MAmdani's charm and Trump's desire to be seen as powerful and likable will lead to his support of such a progressive investment. 

 https://www.pbs.org/newshour/politics/mamdani-pitches-trump-on-housing-investments-by-with-mocking-up-newspaper-with-his-name-in-the-headline

United States and Israel joint strike against Iran - Morning of Feb 28th 2026

 President Trump announced "major combat operations" against Iran this morning. Citing the imminent danger that Iran and it's support groups pose to the United States. Specifically nuclear and long range missile threats. The United States believes Iran or it's support groups have the ability to make a nuclear bomb and the US fears that threat. 

Iran has already began retaliating by launching missile and drone strikes toward Israel and U.S. military installations in the Gulf. Explosions have been reported near bases in Kuwait and Qatar

This is the first daylight raid the US has done in this area in a long time. 

This is the first public joint operation. The President wants everyone to know this happened. 

This morning's strikes are targeting missile factories, naval assets, and leadership compounds. 

How does this relate to the June strikes? Where we supposedly setback the Iranian nuclear program 2 years. Those strikes were not as effective as thought. The underground bunkers remained largely intact. So the US is trying to further delay their nuclear program with a longer term operation. 

What is the broader picture, relating to the economy? 

Is Israel prompting the US to start this conflict to boost their economy to fund the ongoing war with palestine? That's a complicated questioned and very faceted. Short answer no. A large scale war with Iran brings too many further complications and would not be worth it to Israel. 

For the United States this means increased economic activity in manufacturing, specifically in Ohio and Florida where munitions and hardware are developed. The other face of this is shipping costs and Oil prices. If the conflict reaches major shipping lines like the Strait of Hormuz oil prices could jump to over $100 a barrel. 

Is Climate Change Making Inflation Worse?

 There is evidence pointing to a correlation between inflation changes and extreme weather events, but the causation is a bit more complicated than that. There are many factors of the economy affected by climate change. Some examples of these affects are the extreme temperatures that have lowered inflation. Droughts can increase it, and in wealthy countries, heat increases inflation.

In the past year, supply shocks in the agriculture world were caused by low rainfall. Less supplies means higher prices. These shocks are fueled by political issues between countries making it difficult to assist those facing these events. Droughts also affect the waterways used for trade.

Climate change can also mess with electric grids, increasing energy prices. The change in the infrastructure of energy grids is affected, but energy use is also greatly affected with extreme weather incidents.

One of the obvious expenses from weather events is for repairs of damaged properties.

These expenses are coming from Americans with an estimate of paying between $400-900 per person annually. The group of estimators that found that info also found that agriculture has been less affected by weather changes while the higher expenses are in insurance, food damages, and health complications. They predict these costs will start increasing at an increasing rate.

There are also costs in the policies made to prevent climate change.

https://www.nytimes.com/2026/02/23/climate/climate-change-prices-inflation.html

A.I. Paradox and Efficiency Fueled Inflation

 Technological breakthroughs are often viewed as purely deflationary, where better tech should lower costs and boost supply. In contrast, recent reports from Citadel Securities suggests that we may be facing "efficiency fueled inflation". 

While markets are focused on AI and its ability to replace human workers, the direct reality is a massive boom in Capex, creating a perfect storm for the business cycle. Commodity and infrastructure will take an immediate hit, where the push for data centers has sent memory prices up 660%, creating a massive demand for construction labor. This data center surge, which is estimated to create 4.3 million new jobs, is placed at the same time as more restrictive immigration policies. Essentially, labor supply contraction is meeting labor demand spikes. 

While artificial intelligence is a fantastic tool for future efficiency an technological growth, presently it is a massive driver of aggregate demand and resource scarcity that could potentially keep interest rates higher for longer. 

https://www.citadelsecurities.com/news-and-insights/infl-ai-tion-risks/

Hot inflation data jolts Fed outlook

The article reports that the Producer Price Index (PPI) jumped far more than expected, rising 0.8% in January, the largest monthly increase in three years. The biggest driver was a 2.5% surge in trade‑services margins, meaning wholesalers and retailers raised markups sharply. Many economists believe this reflects firms passing through higher import costs from tariffs, which is now showing up in upstream inflation data. This is especially concerning because PPI feeds directly into core PCE, the Fed’s preferred inflation gauge, meaning the spike will likely show up in broader inflation measures soon.

The market reacted immediately, with the Dow falling 521 points and the S&P 500 and Nasdaq also declining as investors reassessed the likelihood of near‑term rate cuts. Analysts noted that the hotter PPI print caused many to push back expectations for the first Fed rate cut, with some now projecting that easing may not begin until mid‑year or later. Because several components of PPI flow directly into core PCE, the report raised concerns that the upcoming PCE release will complicate the Fed’s disinflation narrative. The article also emphasized that sticky services inflation combined with tariff‑driven cost pressures makes the “last mile” of disinflation much harder than markets had assumed. As a result, investors broadly repriced risk, reflecting growing uncertainty about whether inflation will continue to cool smoothly or reaccelerate as businesses keep passing higher import costs on to consumers.

Hot inflation data jolts Fed outlook

Netflix walks away from Warner Bros deal, clearing the path for Paramount

 Netflix and Paramount have been in one of the most intense bidding wars that Hollywood has seen in recent years. Warner Bros. Discovery has been weighing different offers from each of these companies, and each has a slightly different strategy. Netflix is proposing deals in which it would take over only Warner's entertainment division. This includes the streaming platform HBO. It was a $72 billion, cash deal that Warner's Board backed and scheduled a shareholder vote. Paramount entered the battle with a $77.9 billion hostile bid, but came back with an even larger bid at $31 a share (currently $28.17). This bid is higher than Netflix's bid, and it also shows Paramount's desire for the entire company, not just the entertainment division. 

If Netflix came out on top, it would have strengthened its dominance in the field by adding franchises like Harry Potter, DC, and all of HBO's legendary films. Paramount's after more than just this. They want CNN, Discovery, and all cable networks owned by Warner Bros. Analysts argue that the winner of this bidding war will shape the foreseeable future, influencing consumer prices and content budgets. This does raise legal concerns, as a major consolidation could reduce competition, creating only a few large powerhouses.

Warner Bros has been granted a 7-day period from Netflix to consider Paramount's best and final offer. Officially, the board supports Netflix, but if they decide that Paramount's offer is better, Netflix will have 4 days to match or exceed this offer. This is huge news in the entertainment industry and could shape the future of how we use streaming platforms.

https://apnews.com/article/warner-paramount-netflix-5ddba4049473903b35b65e62e37d66bf

Are Jack Dorsey’s aggressive job cuts the start of an AI jobs apocalypse? Economists weigh in

     This article focuses on how the Ceo of Block Jack Dorsey is planning on laying half off his employees. Block is a company that is focused on financial services like Cash App, After-pay, and Bitcoin. The reason Jack Dorsey is pushing the agenda to lay off 4,000 workers is because he wants to cut expenses on employees and but that money on the investment of capital for the company. 

    Jack says that most companies will follow in the upcoming year; he stated his company just wanted to start this layoff earlier rather than be pushed into it. But, economist says this is not the rise of AI taking jobs. Economist says that this is just what happen during periods of rapid expansion and retrenchment. Even though we are in a "slow hire, slow fire" environment it is said that the labor market is nothing worry about for the moment. 

The article focuses on how with the invention of the ATM struck fear into the labor market for how this would replace the jobs of tellers. The thing is we still have tellers; we just have found how to implement  new tasks for tellers to do. This is what most economist expect to happen with the influence of AI, there will be jobs getting taken away by AI but there will be an equal or greater amount of jobs created from the implantation of AI.

Article

Leaders in Global AI Gather at the India AI Impact Summit 2026: Technology and Policy Meet

The India AI Impact Summit 2026, a significant international gathering of government officials, tech CEOs, and policy experts focused on the future of artificial intelligence and its global impact, took place in New Delhi in the middle of February 2026. A growing attempt to influence how AI is created, regulated, and used globally was indicated by the gathering, which brought together leaders from over 30 countries and some of the biggest names in the field, including representatives from Google, Microsoft, Nvidia, OpenAI, and more. High-level speakers emphasized the need for ethical, inclusive, and people-oriented AI governance, particularly as countries attempt to make a balance between innovation and social responsibility. Prime Minister Narendra Modi opened the summit. AI's applications in healthcare, agriculture, and education as well as its effects on employment markets and national security were among the topics of discussion. At the event, a new AI Impact Summit Declaration was unveiled, detailing pledges made by participating nations on cross-border collaboration, ethical standards, and the use of AI in the public sector. The summit was not without controversy, as some questioned technology branding and organizational problems, especially with regard to the representation of specific foreign products. The summit demonstrated the growing strategic importance of new tech diplomacy and was one of the biggest international AI policy meetings in recent memory.

 https://iapp.org/news/a/notes-from-asia-pacific-region-ai-impact-summit-showcases-global-vision-toward-responsible-ai

Trump touts a 'roaring economy' in his State of Union as Americans continue to struggle

 President Trump’s State of the Union address painted a picture of America “back bigger, better, richer and stronger than ever before,” highlighting a booming economy, his 2025 tax cuts, and aggressive trade policies. He emphasized unilateral tariffs, mass deportations, and border security, framing them as essential for national strength, while touting initiatives like “Trump accounts” to help children save for the future. Trump also wove in moments of bipartisan appeal, honoring the U.S. Olympic men’s hockey team and calling for legislation to ban stock trades by lawmakers, though many proposals would still require congressional action.

Yet, much of his address clashed with public perception. Polls indicate many Americans remain dissatisfied with the economy and his overall leadership, and several Democratic lawmakers vocally challenged him over his immigration policies and handling of national tragedies. Critics also noted the address avoided key controversies, such as incomplete releases of the Epstein files, leaving some to see it as more showmanship than substance. While Republican leaders praised the speech as a strong showcase of America’s progress, analysts and Democrats suggested it offered little concrete policy clarity or bipartisan solutions.

https://www.nbcnews.com/politics/donald-trump/trump-roaring-economy-state-union-americans-struggle-rcna259802

Global Cash is Fueling a Historic Start for Latam Stocks

 Global Cash is Fueling a Historic Start for Latam Stocks 

Markets in Latin American countries, including Brazil, Colombia, and Mexico, are seeing a sudden surge in foreign investment and buying. The current growth is the fastest increase in over a decade, with the MSCI EM Latin America Index rising by more than 20% in 2026. 

Renewed economic interest in Latin America is partially the result of upcoming presidential elections in Brazil and Colombia, where policy shifts may create more favorable interest rates at central banks. For example, it is expected that Brazil’s central bank will lower its base interest rate from a record high of 15% in March. Additionally, a recent decision from the US Supreme Court struck down many of President Trump's sweeping tariffs, allowing easier and more affordable trade with the LA region. 

However, local investors are more cautious about the long-term effects of such political changes than foreigners. Indeed, many are still painfully aware of the “lost decade” of near-zero per capita GDP growth from 2015-2024. Nonetheless, there is no doubt that Latin America is an emerging market to keep an eye on– its performance is outpacing its peers, with more diversification away from US assets that have limited Latin American nations previously.

Economic Data Suggests Interest Rate Cuts Aren’t Imminent

     Recent data on jobs and inflation has eased the urgency to make additional cuts to the interest rate. The open market committee may wait now until June or July before they cut rates again. This is primarily due to January's jobs report showing stronger than expected. There was an unexpected gain of 130,000 nonfarm payrolls, which is the best performance since 2024. With sustained improvements in employment and continued progress towards the target, 2% inflation could justify pausing further easing. Currently, inflation is at 2.4%, which is slightly above the 2% target but trending downwards, and with the firmer job growth, it reduces the immediate need for aggressive rate cuts at this time. 

    These developments shape expectations for the months ahead; markets anticipate that the open market committee will hold rates at the March 18th meeting. This, however, needs to be supported by February's employment, inflation, job openings, and retail sales data to determine if January's numbers are a true trend. The new Fed chair, Kevin Warsh, introduces the possibility of potential cuts to happen later in the year. However, no major policy shift has been priced into the markets yet. There will likely only be two to three rate cuts during 2026, and these cuts will likely be during the second half of the year. The first move may not happen until summer. The next key point and determinant of how rate cuts will play out this year will be the March 6th jobs report, which would either reinforce the case for waiting or reopen the idea of an earlier easing. 

https://www.forbes.com/sites/simonmoore/2026/02/23/economic-data-suggests-interest-rate-cuts-arent-imminent/ 

The Impact of Sci-Fi on the Outlook of AI

Everyone loves a good science fiction story or movie for entertainment. However, as our real-world technology gets more and more advanced, these stories may be impacting how we view the future of AI. 

The Brookings Institution recently published a paper discussing the future of AI and how sci-fi has impacted our outlook on its future. In general, many people assume that AI will replace humans in many jobs and fear that this will lead to job shortages and increased unemployment. The paper released by the Brookings Institution discusses that the AI community was somewhat influenced by sci-fi and envisions AI as machines that act similarly to the human brain and will be more capable than humans. It will likely be cheaper than human labor, and so, people assume it will replace humans. This is how AI is portrayed in many sci-fi stories, and the authors of the paper suggest that this may not really be an accurate view of AI. The authors suggest that the reason the human replacement view of AI is so prevalent is that it matches up with “science fiction narratives.”

The paper then explains that the view which sees AI as a complement to humans is, in reality, much more likely. Science fiction is, in reality, just fiction, and AI may actually turn out to be a pro-worker force. To support this view, the authors provided a few historical examples. First, the job market will change in order to accommodate AI while still maintaining a need for human jobs. Research from 2024 shows that in 2018, six out of every ten workers were employed in jobs that did not exist in 1940. AI will change the job market in some ways and will require some adaptation, but it is unlikely to make human workers obsolete. 

The author also discussed how tech has enhanced many pre-existing jobs. The digital spreadsheet, for example, had a huge impact on accounting and finance jobs and helped them to become more efficient. The authors suggest that in the real world, AI has actually been making human workers more valuable by allowing them to be more productive. 

Finally, the authors point out that AI is ultimately under human control, so humans will continue to have valuable roles. The government may also step in at some point with changes in taxes to encourage the hiring of more workers if AI does become too much of an issue, in the same way that they have encouraged new technologies through spending and tax cuts.

 Overall, this paper explains that our outlook on the future of AI may be a bit more dramatic than reality. We have an underlying perception of AI replacing humans, which is heavily influenced by fiction. AI will likely not replace human workers, but the job force will need to adapt and will likely become more productive because of AI advancements. 

https://www.axios.com/2026/02/25/ai-chatgpt-jobs-market

https://apple.news/AAcK1f8DoSmeLf959GYXCFw

 

The Global M&A is Rolling into 2026, Sparked by AI

     The M&A (mergers and acquisitions) market is blowing up at the moment. This is because in 2025 companies spent almost $5 trillion on business deals and that momentum is carrying straight into 2026. A lot of this is being drive by AI and the battle to purchase the tech, data centers, and energy so companies can keep up with one another. There are already lot of huge deals going on costing over $5 billion in 2026. This is similar to 2025 where there was a total of 60 deals that topped the $10 billion mark, which is the most we've seen in years. Companies are basically playing a large-scale game of catch-up where big companies are merging to ensure they have the resources needed to keep AI running.

    The issue is even though everyone wants to make these moves, cash is actually getting really tight. Referred to as a "capital squeeze" is happening because building AI infrastructure is incredibly expensive. We will need almost more than double of our current data center capacity by 2030 to keep up with the advancement of AI. Due to this companies' money supplies are being drained. This is causing companies to be more selective in what they choose to invest in.

Below is a graph of some recent "Mega-deals" by year

Source: https://www.cnbc.com/2026/02/25/global-ma-boom-surges-2026-ai-mega-deals-capital-squeeze-merger-and-acquisition.html

Are trading cards comparable to investments?

Last week, Logan Paul sold a Pokémon card to AJ Scaramucci, son of Anthony Scaramucci, for an astound $16.5 million. This marks the largest auction and selling of a Pokémon card in history. The card, which was made in 1998 and is estimated to be one of only a few dozen, was purchased by Paul 4 years prior for only $5.3 million, netting Paul a return of over 200%. Scaramucci claims that the purchase is "passion first, and kind of an investment second," meaning that the bid was not made entirely for monetary profit.

The "Pokémon Index," a measure of the value of  Pokémon cards, is currently up 145% in the past year. Compare this to S&P 500 which is only up 15.2% the past year, and the choice of where to invest seems obvious. However, Pokémon cards are a very risky asset, if even an asset at all. Their value comes from scarcity and collector's perceptions of how "rare" they think certain cards are. This causes many to view them as an unstable and unreliable form of investment.

Using collectibles as a form of wealth building is incredibly interesting to me. Their value can change quickly as more cards are brought into and taken out of circulation. A card that is worth a million to one person may be seen as worthless to another, so viewing them as an "investment" is entirely subjective. Having a few cards myself I can definitely say I have only ever viewed them as fun and have never thought about what their worth would be in future years, but maybe I should go back and see if any of them have gained value.

Article: https://www.cnbc.com/2026/02/25/pokmon-card-winner-scaramucci-says-collectibles-are-asset-class.html

Has the labor market grown stagnant and where will this lead?

During the years of the covid pandemic there was a period known as the "great resignation" where job movements were volatile. The rate of hiring, firing, and quitting was extremely rapid during that time. This was due to large numbers of people quitting their jobs, leaving many vacancies, and ultimately forcing businesses to create incentives, such as signing bonuses and increased salaries, to fill up those positions. 

Now we are in a time that some are calling the "big stay", which reflects the idea that we are in a period of very little firing and very little hiring. This is due to people "hoarding" their jobs out of fear of returning to the extreme volatility of the Covid years and not being able to retain jobs/employees.

This has caused the labor market to move like a pendulum. During the pandemic it swung so far to one side that for every worker out of work two job openings were available. It has now swung too far to the other side, which has resulted in not much movement in the job market. This stagnation could be seen as a sign of stability, but it may lead to increased unemployment.

This "big stay" could result in unemployment numbers rising because as more people enter the labor force, they are having a hard time finding jobs due to the lack of openings. Ultimately, this may end up harming the economy due to stagnant movement, decreased competition, and increased unemployment. It would be ideal for the labor market to stop swinging as drastically and return to a less volatile movement. Overall, it can be seen that the labor market has grown stagnant after a period of extreme volatility. 

Source: https://www.cnbc.com/2026/02/19/life-after-the-great-resignation-incentives-are-dimming-for-workers-to-change-jobs.html

How AI is Changing Policy's

 On Tuesday, February 24, 2026, Lisa Cook, the governor of the Federal Reserve, suggested that AI could be the reason the central bank will have to make difficult decisions between keeping interest rates elevated to slow inflation from rising or lowering interest rates to address lower employment. Cook explains that AI has been driving productivity, and if this continues, even if firms stop using AI, the labor market will lead to an increase in unemployment. Cook builds on this by saying that because of the AI transition, the new policies the FED is contemplating could have a profound effect on monetary policy.  She also discusses that Rate cuts may not be a good solution for this problem, and they may not be able to sole for the increase in unemployment. There, for normal demand-side monetary policy my not be able to solve for unemployment caused by AI.  So policymakers such as Cook will be facing a trade-off between unemployment and inflation.

https://finance.yahoo.com/news/fed-governor-lisa-cook-says-ai-could-leave-fed-with-hard-choice-fight-inflation-or-boost-employment-172553175.html

Climate Change = Inflation? The Truth Behind it. - Justin Beekman

         Climate change is one of the most controversial things out there. Most of the time, when discussing climate change, you think about ice melting or hurricanes. The truth is, climate change is also affecting us on a small scale and fiscally hurting us. Some connections to our economic lives is the extreme heat to our electricity bills or extreme cold in the winter. 

    Our food supply is not safe either. Extreme weather has affected crop production, which then, in turn, slows down meat production and ultimately slows down the whole food sector. As simple economics states, less supply, higher price. Commonly used shipping routes like rivers are also having a harder time, due to low water levels. The trade routes being backed up can also cause a rise in prices.

    Going back to when I first mentioned it, but energy prices are also affected. Extreme weather causes fluctuations in energy uses which can add up over time for a family that is sticking to a tight budget. Smaller countries that have less excess money are also struggling by having to replace infrastructure due to extreme storms and anomalies. 

Lastly, one of the most hard hitting price hikes, is insurance. Families are being pressured to insure things for more and more things every year. California families are paying for wildfire coverage, and Texas families are paying to cover ice damage. The climate is causing families all around to pay more. 

    The climate affects more than just our yearly camping trips. Families around the world are feeling the hits of Mother Nature daily. Whether it's rain or snow Mother Nature has its hand in our pockets. 

https://www.nytimes.com/2026/02/23/climate/climate-change-prices-inflation.html 

Why American Express Plunged Today

     Credit card giant American Express saw its stock plummet 7.5% today, which is a rarity for such a large and established company. The downturn in AMEX stock is predicated largely on a post from a user on X called “Citrini” who laid out a plausible scenario where a recession can happen in mid-2028 due to artificial intelligence taking a large amount of white collar labor. Citrini claims that the potential recession could see unemployment of up to 10%. In addition to the claims on X, Fed Governor Chris Waller stated that a potential positive February job report could be used as potential rationale behind the Fed keeping interest rates steady. 

    The combination of the two aforementioned pieces of information led to a sizable downturn in AMEX stock due to investors wanting to “de-risk” their portfolios and avoid being hit with a bigger loss down the line, especially with how hot stocks have been running. It’s certainly interesting to see how impactful mere reports can be, especially from a user on X having the ability to have large influence on the behavior of investors. 

https://finance.yahoo.com/news/why-american-express-plunged-today-190948259.html

10-year Treasury yields rise after high court rebukes Trump’s tariffs

After the Supreme Court ruled against Trumps tariffs. The 10-year yield increased as investors were concerned that the loss of tariff revenue could worsen the fiscal deficit and hurt the demand for U.S debt. This was after Trump decided to announce a new 10% global tariff. Economist believe that since tariffs contributed somewhat to last years inflation, the decision to rule against them could make inflation related issues easier to solve and also make Federal Chairman Kevin Warsh's job easier.

With this court ruling how is the process of recovering the tariff revenue going to work? Many businesses and corporations were affected by these illegal tariffs. So along with them increasing bond yields, they also affected the amount of spending by organizations. Since tariff revenue contributed partly to inflation in 2025, hopefully this ruling as the article suggest can help solve inflationary related issues in the economy.

https://www.cnbc.com/2026/02/20/us-treasury-yields-key-inflation-data-release.html

New home sales hit a 4 year high at the end of 2025

    The U.S. housing market showed surprising strength at the end of 2025, as new home sales jumped to near four-year highs. Data from the US Census show that sales rose sharply in November and remained high in December, indicating strong demand despite high prices and borrowing costs. While some regions like the Midwest and West saw growth, others, such as the Northeast, experienced declines, showing that local economic conditions still play a big role in housing activity.

    From an economic perspective, this trend reflects a classic supply-and-demand issue. Lower mortgage rates have made more households eligible to buy homes, but the limited housing supply continues to push prices upward. According to the National Association of Realtors, if more buyers enter the market without an increase in construction, affordability could worsen. Overall, the recent surge in sales suggests improving demand, but long-term stability will depend on increasing housing supply.

https://www.theepochtimes.com/business/us-new-home-sales-hit-near-4-year-high-in-november-2025-post-5988385?welcomeuser=1 

U.S. Supreme Court’s decision on former President Trump’s tariff policy based on the latest reporting

 The U.S. Supreme Court delivered a significant blow to former President Donald Trump’s trade agenda on February 20, 2026, by ruling that his sweeping global tariffs were unlawful because he lacked statutory authority to impose them under the International Emergency Economic Powers Act (IEEPA). In a 6–3 decision, the Court held that tariffs are the exclusive domain of Congress, not the executive branch, and that IEEPA does not clearly authorize such broad tariff powers for a president. The ruling not only invalidates many of the tariffs put in place over the past year but also raises complex questions about whether companies that paid those duties will be entitled to refunds.

In response, Trump sharply criticized the decision and promptly moved to impose a new 15 % global tariff under a different statutory authority, illustrating that trade policy uncertainty will persist despite the court’s check on executive power. The ruling underscores the constitutional balance between branches of government, signals limits on unilateral presidential action in economic affairs, and has sparked reactions from international partners like the European Union urging the U.S. to honor existing trade commitments. Businesses and markets are now watching closely as the legal and economic repercussions unfold.

ECB Official Says Chinese Imports Helped Push Eurozone Inflation Lower

A high-ranking policymaker at the European Central Bank said on February 21, 2026, that the rise in low-cost imports from China was an important factor in the fall in eurozone inflation below expectations. Lower import prices have been an important factor in the reduction in overall inflationary pressures in the region, according to ECB policymaker Fabio Panetta.

Inflation in the eurozone has fallen to about 1.7 percent in January, which is below the ECB's target of 2 percent. Panetta said that lower import prices have helped to reduce costs for businesses and consumers, leading to a slowdown in price increases. This is welcome news after a long period of high inflation in the region.

However, Panetta said that this trend does not necessarily affect the medium-term inflation outlook. He said that policymakers need to continue to monitor external factors such as exchange rate movements, global trade patterns, and supply chain developments. These factors could affect price stability in the coming months.

This is happening as the ECB is set to reassess its economic growth and inflation forecasts. Policymakers are trying to carefully weigh the impact of global import trends against risks in the energy market and the overall economy in Europe.

https://www.reuters.com/world/china/ecbs-panetta-says-chinese-imports-helped-drive-sharperthanforecast-inflation-2026-02-21/?utm_source=chatgpt.com

The jobs picture still looks muddy, even with surprisingly strong January growth

The U.S. saw the strongest monthly gain since 2025, adding 130,000 jobs in January. The unemployment rate decreased to 4.3%, the lowest level it's been in several months. This is a positive step forward but the job market overall is still weak. 

According to the Bureau of Labor Statistics, most of Januarys new jobs were in the healthcare field. This raises concerns because job growth is not spread throughout industries. Additionally,  last year's hiring was slower than first reported. Wage growth is also slowing, which could impact consumer spending because families rely on income to keep up with rising costs.

Although the economy is growing, the job market is not matching that pace. Economic growth usually comes with consistent job creation, which has not been the case. This puts the Federal Reserve in a tough spot as it decides whether to cut interest rates to support the market or keep the rates to control inflation.

Overall, January's numbers are looking promising, but it's too early to say the job market is truly stable and strong again.

https://www.cnbc.com/2026/02/11/the-jobs-picture-still-looks-muddy-even-with-surprisingly-strong-january-growth.html 

Economy U.S. trade deficit totaled $901 billion in 2025, barely budging despite Trump’s tariffs

 In 2025, the United States ran a $901.5 billion trade deficit, according to the Commerce Department. This is interesting as this amount remains almost unchanged from 2024, decreasing by just 0.2%. Trump's tariff's were implemented due to this deficit in efforts to decrease it. However, as we can see this did not go as planned as a decrease of $2.1 billion is not significant compared to the overall 900 billion number. 

It's worth noting that by October, the deficit temporarily fell to its lowest monthly level since 2009. This was contradicted as it rose again in December. Even with aggressive tariffs aimed at reducing the trade gap, the U.S. trade deficit remained almost unchanged. What do you think the U.S. could do to lower the trade deficit? 

https://www.cnbc.com/2026/02/19/us-trade-deficit-totaled-901-billion-in-2025-despite-trumps-tariffs.html

Minutes from the January meeting of the Federal Reserve revealed that they would not lower interest rates right now and want to wait and see if inflation cooperates before making any further cuts. However, there was a divergence among members in terms of future policy ideas.

Some believe it is best to hold interest rates steady until they can interpret incoming data successfully. Others believe that rates might actually increase in the near future. With the Fed already divided among ideological lines, the gap could grow if Kevin Warsh is confirmed as the next chair, replacing Jerome Powell in May. Warsh is in favor of lower interest rates, a position also supported by the president. Everyone will keep a close eye on inflation as the Fed decides what to do moving forward in 2026 and beyond.

https://www.cnbc.com/2026/02/18/fed-minutes-january-2026.html 

Tariff revenue soars more than 300% as U.S. awaits Supreme Court decision

Tariff revenue has surged this year, giving the US government a win in the revenue column. In month of  January, customs brought in about $30 billion, summing up the tariff collections for the fiscal year to $124 billion. That is more than 3 times what the government collected during the same period last year.

These tariffs, introduced last spring, have helped slow the growth of the federal budget deficit. January’s deficit was $95 billion, which is about 26% lower than a year earlier. Overall, the deficit for the fiscal year so far is down by about 17%.

However, the Supreme Court is reviewing the legal authority used to impose the tariffs, and a ruling is expected soon. If the court rules against the administration, the government could be forced to refund much of the revenue already collected, quickly wiping out recent gains.

Even with increased revenue from tariffs, long term challenges persist. Interest payments on the national debt keep climbing and are now one of the federal government’s largest costs.

https://www.cnbc.com/2026/02/11/tariff-revenue-soars-more-than-300percent-as-us-awaits-supreme-court-decision.html

The rule of law is key to capitalism − eroding it is bad news for American business

This article stood out to me, especially since I rarely use The Conversation US as a source. However, the author’s background makes the piece credible. Robert Bird, a professor of business law and ethics at the University of Connecticut, builds his argument on real world experience of how law affects business decisions, rather than focusing solely on politics or ideology.

Bird’s main point is that capitalism depends on a strict and predictable rule of law, and I found this convincing because he links legal principles directly to economic outcomes. Rather than simply arguing for more or less regulation, he highlights the need for consistency and fair enforcement. He explains that chaotic deregulation, with sudden rule changes and selective enforcement, can damage investor confidence, make long-term planning difficult, and increase business costs. This made me rethink the common belief that less regulation always leads to more growth.

I also found his use of data and global comparisons effective. Bird uses World Justice Project rankings to show that the U.S. now falls behind several other countries in rule-of-law strength. This makes his argument more concrete and shows that legal instability can harm global competitiveness. His discussion of trade agreements, property rights, and contract enforcement shows how legal uncertainty can weaken markets and discourage both domestic and foreign investment.

Another strong part of the article is its link between legal uncertainty and the job market. Bird explains that unpredictable legal and political situations are causing talented people to leave the U.S., showing that the harm goes beyond just companies and affects workers, too. The examples of more job applications abroad and growing interest in foreign citizenship show that instability in the rule of law changes where people want to. Overall, the article argues well that “smart regulation” does not block capitalism but actually helps it. Bird supports his points with business law, data, and real-world examples, showing that weakening the rule of law harms innovation, investment, and economic freedom. Even though I do not usually read this publication, the author’s expertise and clear argument made the article convincing and relevant.

https://theconversation.com/the-rule-of-law-is-key-to-capitalism-eroding-it-is-bad-news-for-american-business-254922

When Economic Metrics Stop Telling the Truth: Goodhart’s Law

When Economic Metrics Stop Telling the Truth: Goodhart’s Law

Author: Inesh Tickoo

Policymakers and firms rely on indicators to guide decisions. Goodhart’s Law identifies a

limitation of this approach, that when measures start being targets, they stop being good measures.

Let me explain that more clearly.

A speedometer tells you how fast you’re going. A speed limit changes how you drive. Once a speed

limit exists, it changes drivers’ behavior to avoid tickets, like slowing down when they see the cops.

When a statistic is used to observe the world and its reality, it behaves like a speedometer. When the

same statistic is used to judge performance or trigger rewards and punishments, it’s like a speed limit.

Inflation statistics like the Consumer Price Index (CPI) track the cost of living. When the Fed

says “we want 2.1% inflation,” businesses start setting prices and wages with that number in mind.

This statistic now affects strategy and sets expectations rather than indicating underlying conditions.

Goodhart’s Law also applies to labor markets and productivity. Firms that focus on per-hour

output or quarterly efficiency targets may boost short-term productivity through moves like cutting

training, delaying maintenance, or increasing employee workloads. Cutting training might save time

and money this quarter, but workers may turn out to be less skilled later. Delaying maintenance

will keep machines running today but they might break down tomorrow. Increasing workloads

might squeeze more output out of workers for now, but it leads to burnout, mistakes, or turnover.

While a few metrics improve, the underlying health of the firm or economy may deteriorate, leading

to weaker long-term growth. At the same time, expansions can sometimes mask fragility. Strong

headline indicators may encourage risk-taking and leverage, even if deeper structural problems are

building beneath the surface. When conditions shift, those hidden weaknesses become visible, often

abruptly.

Overall, Goodhart’s Law says it’s important to use economic indicators for diagnostics rather

than goals. Metrics and statistics are essential for understanding the economy, but overreliance on

any single measure can distort incentives and reduce the reliability of the signals policymakers and

investors depend on.

CPI rising slower than expected

 Consumer inflation showed signs of cooling to start 2026, coming in slightly lower than economists expected. According to the Bureau of Labor Statistics, the consumer price index (CPI) rose 2.4% in January compared to a year earlier. This was down from the previous month and marked the lowest annual inflation rate since May 2025, suggesting price pressures may be gradually easing.

Core inflation, which excludes food and energy, increased 2.5% annually, also meeting expectations and reaching its lowest level since 2021. Every month, overall prices rose just 0.2%, while core prices increased 0.3%. Much of the increase came from housing costs, though even housing inflation has slowed, with annual rent growth dropping to around 3%. Other major categories showed mixed trends. Food prices rose slightly, while energy prices fell 1.5% for the month. Vehicle prices remained relatively stable, and some items, such as eggs, have dropped sharply over the past year after previous spikes. These changes suggest that some of the most important household expenses are beginning to stabilize.

The lower-than-expected inflation reading has important implications for monetary policy. Investors increased expectations that the Federal Reserve may begin cutting interest rates later in 2026, with markets anticipating a possible reduction as early as June. Lower interest rates could help support borrowing, investment, and overall economic growth. However, the broader economic picture remains mixed. While GDP growth has been relatively strong, the labor market has shown signs of slowing, and inflation still remains slightly above the Fed’s long-term 2% target. This suggests the economy may be moving toward a more stable phase, but policymakers will likely remain cautious as they balance controlling inflation with supporting economic growth.

https://www.cnbc.com/2026/02/13/cpi-inflation-report-january-2026.html 

Labor Market Expectations Improve Slightly ; Short-Term Inflation Expectations Decline

 In the January 2026 survey by the Federal Reserve Bank of New York, households reported that they expect smaller price increases over the next year compared with last month. The median short-term inflation expectation—the rate consumers think prices will rise over the next 12 months—fell to 3.1%, down from 3.4% in December. Expectations for inflation over the next three and five years stayed steady at 3.0%. This shift suggests that consumers are becoming slightly more confident that inflation will cool in the near future, even if prices overall have been elevated in recent years. 

The survey also showed that people feel a bit better about the job market, with more households expecting wage growth and a lower chance of job loss in the coming year. However, expectations about household income growth were slightly lower, and many respondents reported concerns about future financial conditions and access to credit. Overall, while inflation worries eased in the short term, households still hold mixed views about their personal economic situation. 

Global Week Ahead: Markets Brace for More AI Noise and "Scare Trading"

 Global stock markets have been shaken in recent weeks by fears that rapid advances in agentic AI could disrupt a wide range of industries. Investors have been selling off stock. Particularly in Europe where software firms like Dassault Systems and RELX saw sharp declines. Wealth management companies such as St. James's Place, Aberdeen, and Quilter also experienced these declines. UBS analysts warn that AI-driven disruptions may occur beyond just software and that markets may not yet fully reflect the potential credit risks. 

However not all analysts believe the situation is dire. Dan Ives of Wedbush argues that fears of a "software Armageddon" are exaggerated. Basically suggesting that major firms like Saleforce and ServiceNow are likley to be key beneficiaries of the AI revolution. This highlights further uncertainty about which industries will be harmed or helped as AI adoption accelerates.

Attention is now shifting to focus on a major AI summit in New Delhi, where leaders from companies such as Anthropic, Microsoft, Mistral AI, and Meta are expected to announce partnerships and deals, particularly in cloud computing and AI infrastructure. With India's large tech market and deep engineering talent pool, the event could offer important signals about the next phase of global AI expansion and its impact on markets.

Global Week Ahead: Markets Brace for More AI Noise and "Scare Trading"

US inflation falls more than expected to 2.4% in January

     The CPI dropped lower than expected in as recent data shows the CPI was 2.4% in January 2026. This number of inflation is down from December 2025 which was 2.7%. The recent data coming out below the market forecasts suggests that there has been softer price pressures in the economy and marks one of the lowest CPI readings the economy has seen in awhile. Core inflation which excludes food and energy is also down which suggests underlying price increases are moderating as cost of gas, cars, and housing slow. 

    The cooler inflation number leads many to believe that the FED will be able to cut rates sooner than expected and more aggressively due to price growth moving closer to their target of 2%. Analyst caution this move due to certing sectors like services and tariff related industries continue to see a rise in prices. Policy makers will weeigh the data and compare it to other economic trends like labor markets strength and wage growth when deciding on future rate changes. 

https://www.ft.com/content/ef64fa37-771b-4e41-a879-7f05b42ec6af

Concerning Layoffs in January

 Layoff announcements kicked off 2026 on a concerning note, reaching their highest level for any January since the global financial crisis. According to Challenger, Gray & Christmas, U.S. employers announced 108,435 job cuts during the month. This represents a 118% increase compared to the same time last year and more than triple the total from December, suggesting that many companies are becoming less optimistic about the economic outlook for 2026. At the same time, hiring plans dropped sharply to only 5,306 new positions, marking the lowest January level since 2009.

Other labor market indicators also point to softening conditions. Job openings fell significantly in December to 6.54 million, their lowest level since September 2020, and have declined by more than 900,000 since October. As a result, the ratio of available jobs to unemployed workers has fallen to 0.87 to 1, a major shift from the very tight labor market in 2022 when there were more than two job openings per unemployed worker.

Some of the increase in layoffs comes from major corporate announcements, which has raised concerns about broader economic weakness. The transportation sector saw the largest cuts, mainly due to UPS planning to reduce its workforce by over 30,000 employees. The technology sector followed, driven largely by Amazon’s plan to eliminate about 16,000 jobs. These large-scale layoffs suggest firms may be preparing for slower demand and tighter economic conditions.

However, official government data has not yet shown a dramatic decline in employment. Initial jobless claims remain relatively low historically, though they increased slightly at the end of January. Private payroll growth was also weak, with employers adding only 22,000 jobs during the month, well below expectations.

Overall, the data suggests the labor market may be shifting away from the extremely strong conditions seen in recent years. Rising layoffs combined with declining hiring plans could signal slower consumer spending and economic growth ahead, since job stability is a key factor supporting household confidence and overall demand.

https://www.cnbc.com/2026/02/05/layoff-and-hiring-announcements-hit-their-worst-january-levels-since-2009-challenger-says.html