TO: Global Capital Markets
FROM: Someone Who Has Been Watching
DATE: February 25, 2026
RE: The past 48 hours. All of it.
Please be advised that the following events occurred in rapid succession and that none of them, individually, should have been surprising. Yet here we are, collectively behaving as if a fire alarm went off in a building that has been on fire since January.
Let us review.
ITEM ONE: The Chicago Fed President spoke. Markets recoiled. This was predictable.
On Tuesday morning, Austan Goolsbee stood before the National Association for Business Economics in Washington and said, with the calm of a man who has been saying the same thing for months and keeps getting ignored, that a 3% inflation rate "is not good enough — and it's not what we promised when the Federal Reserve committed to the 2% target. Stalling out at 3% is not a safe place to be."
He further noted that front-loading too many rate cuts "is not prudent."
The market's response to this unambiguous statement of the obvious was to interpret it as a fresh betrayal. Futures repriced. The 10-year Treasury yield ground lower — not from conviction, but from the weird market logic where bad macro news becomes a bond-buying opportunity because it suggests the Fed will eventually capitulate. Everyone is always playing three moves ahead and losing to the present.
For the record: futures traders are now pricing a 50-50 chance of a cut in June and roughly 71% odds of a move in July. That is the market pricing in hope like a coping mechanism. Which, to be fair, is exactly what it is.
ITEM TWO: Tariffs came in at 10% instead of the feared 15%. The market still sold off Monday. Interpret this however you wish.
Monday was an exercise in synchronized panic. Volatility spiked. The VIX jumped to 21. AppLovin dropped 9%. CrowdStrike fell almost 10%. Software stocks bled across the board, accelerated by a Citrini Research note suggesting that agentic AI will eat white-collar revenue the way termites eat a floor — quietly, structurally, and by the time you notice, it's too late to do anything about it.
American Express fell more than 7%, and the broader financials complex cracked on fears that a weakening equity market would finally start affecting the spending patterns of high-income consumers. As if the wealthy were one bad Monday away from reconsidering their restaurant choices.
The tariffs landed at 10%, not 15%. This is, mathematically, better than feared. The market still went sideways into the close. There is a version of market psychology worth studying here, one where the relief of a smaller shock is immediately replaced by the anxiety of wondering what the next, larger shock will be. Markets don't discount the present. They discount every possible future simultaneously and then panic about the weighted average.
ITEM THREE: Meta handed AMD a warrant. Nobody called it what it is.
AMD surged roughly 8% Tuesday on the back of a major AI infrastructure deal with Meta. The details, which deserve more than the passing mention they received in most morning briefings: full warrant vesting requires AMD's stock to hit somewhere near triple its current price. This is not a supply agreement. This is Meta writing a check for the right kind of future — one where Nvidia does not have the leverage to dictate terms to the people spending $135 billion on compute this year.
The hyperscalers have done the math. Vendor lock-in, at this scale of capital expenditure, is existential risk dressed in silicon. Meta is not diversifying its chip supply out of principle. It is doing so because concentration risk at $135 billion annually is the kind of thing that ends careers and rewrites board mandates.
AMD's stock moving 8% on this news is the market's polite acknowledgment that competition is good for everyone except Nvidia's margin story. File that thought away for tonight.
ITEM FOUR: Bitcoin retook $64,000. The Fear & Greed Index is at 5. These two facts coexist.
Bitcoin briefly reclaimed $64,000 as sellers paused and crypto miners rallied after Monday's AI-related software rout showed signs of exhaustion. The Fear & Greed Index, which measures crypto market sentiment on a scale designed to make you feel things about numbers, sat at 5. Five. Out of 100.
For context: a score of 5 means the aggregate emotional state of the crypto market is indistinguishable from a person who has just received unexpected news about their plumbing.
Meanwhile, Stripe's stablecoin arm Bridge reported that its transaction volume quadrupled last year, a data point that received almost no attention despite being a fairly significant signal about where real-world utility is quietly accumulating in this space. Stablecoins are not experiencing a cycle. They are experiencing adoption. These are different things, and the market only prices one of them correctly.
Also: the Federal Reserve proposed scrapping "reputation risk" as a supervisory factor, which would remove one of the primary tools regulators used to pressure banks into quietly debanking crypto companies. This matters. Not today, not this quarter, but as a structural shift in the legal architecture around digital assets, it is the kind of policy move that looks obvious in retrospect and invisible in real time.
ITEM FIVE: Nvidia reports tonight. You already know this. Let's talk about what you might not have priced.
The consensus expects $65.7 billion in revenue. Twelve consecutive beats. The Blackwell architecture. The hyperscaler capex avalanche that keeps arriving in waves large enough to dwarf entire industries.
What the consensus may be underweighting: higher bandwidth memory costs due to sector shortages could pressure Nvidia's margins in ways the headline revenue figure won't immediately reveal. Gross margin held near 75% last quarter. If it softens even to 72%, the reaction won't be proportional. It will be violent. The stock is priced for perfection in ways that make even minor disappointment feel like structural failure.
There is also the Salesforce and Snowflake prints tonight. CRM reports into a market actively debating whether AI replaces the category of worker who uses CRM software. SNOW reports into a market asking whether cloud data warehousing is a product or a commodity. Both companies have perfectly reasonable answers to both questions. Whether the market is in a mood to hear them is a different problem entirely.
CLOSING REMARKS:
The macro picture underneath all of this has not changed in any meaningful way. Inflation is stuck above 2% and the Fed is not moving until the data says otherwise, and the data is delayed because of a government shutdown that nobody has fully accounted for in their models. Private credit markets are getting nervous in quiet ways that don't make morning headlines but do make the kind of late-cycle noises worth paying attention to. Credit spreads remain tight for now. Watch them.
Q4 GDP came in at 1.4%. Gold is near $5,200. The 10-year yield is drifting toward 4.06%. These things are not contradicting each other. They are agreeing about something, slowly, in the language of asset prices, and the message is approximately this: the economy is still moving forward, but it is carrying more weight than it looks like from the outside.
This memo will not be acknowledged. Markets will continue behaving exactly as they have. Goolsbee will speak again next month. Someone will be surprised.
That's all.
