Algos were understandably aghast at the Feb PPI print: 0.7% headline (3.4% YoY) and 0.5% core. That little after-hours channel breakout is no more.

There’s so much for Powell to talk about in today’s press conference: from the (still) growing risk of stagflation to the fact that the US has been relegated to the corner of the cafeteria where no cool kids sit.

As we discussed at length in the Year Ahead 2026 post [HERE], the divergence endemic to our K-shaped economy is problematic in many ways – not the least of which being the Fed reaction function it drives. Ordinarily, the FOMC would reverse course from a rising rate regime to one where lower rates can begin to address excessive inequities.

They can’t do that when inflation is as high as it currently is – even if the inflation represents an unforced error brought on by the president’s colossal strategic errors. Will Powell touch on this in the Q&A? Will he remain with the Fed after his tenure as Chairman concludes? Will Trump insult him after the press conference no matter what Powell says?

As always, we’ll have lots more to say after the presser.

continuing…