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Feb 17, 2026
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LONG
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Goolsbee states, "I still think there are several more rate cuts that can happen in 2026," provided inflation proves transitory. He defines the neutral rate target "loosely... around 3%." Current rates are restrictive relative to a 3% neutral target. If the Fed executes "several" cuts to normalize policy, yields on the curve must fall, pushing bond prices (TLT) higher. LONG. The destination is lower rates, even if the path is bumpy. Inflation remains "stalled out around 3%," forcing the Fed to hold rates higher for longer. |
CNBC
Chicago Fed President Goolsbee: Several more ...
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Feb 17, 2026
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LONG
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"Goods prices, which had been [low] inflation... jumped up... If you take out commodities by the percent tariff content... you see a pretty clear relationship... those goods where there were more tariffs have tended to have higher inflation." Goolsbee explicitly links recent price jumps to tariffs. If tariffs persist or expand (a known macro theme), the cost of goods and raw materials will rise. Commodities act as a hedge against this specific type of "cost-push" inflation. LONG. A hedge against the "warning signs" Goolsbee sees in goods inflation. The tariff impact proves to be a "one-time thing" as Goolsbee hopes, and deflationary pressures return. |
CNBC
Chicago Fed President Goolsbee: Several more ...
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Feb 17, 2026
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WATCH
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"We've seen progress on the shelter side. But there's little statistical pollution still going through that." Shelter is the largest component of inflation. If the "progress" Goolsbee sees continues, it unlocks the rate cuts mentioned above. Lower rates are the primary catalyst for homebuilder valuations and mortgage demand. WATCH. Wait for confirmation that shelter inflation is actually clearing the "statistical pollution" before aggressively adding exposure. Services inflation (which includes housing services) remains "not tamed," keeping mortgage rates high. |
CNBC
Chicago Fed President Goolsbee: Several more ...
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