Financial Markets Give President Trump a Vote of No Confidence
February 27, 2026
The week of President Trump’s State of the Union Address is ending with steep losses in U.S. equities, a drop of the 10-year Treasury yield below 4.0%, a big rise in the prices of oil, gold and silver, weaker crypto, and a flat dollar. Investors are reacting to today’s unexpectedly sharp rise of U.S. producer prices, the contrast of that news with the speech’s insistence that inflation is falling but also to other concerns like unwanted foreign policy gambles, federal police on U.S. city streets, fiscal policy changes that are likely to aggravate an already excessive U.S. debt service burden, and highly divisive language from all the president’s men. There is concern too about the composition of U.S. growth, in particular about the over-reliance on developing AI, whose benefits may not emerge for several more years.
America has been blessed in the past with its greatest leaders synchronizing with its most critical challenges: the likes of Franklin, Paine, Washington, Adams, Jefferson, Madison and Monroe at the nation’s founding and earliest years, Lincoln in the 1860’s, Teddy Roosevelt at the turn of the 20th century, FDR to lead the country out of its Great Depression and to victory over fascism in the Second World War, and Truman to solidify the country’s hegemonic role as leader and preserver of the free world over the ensuing seven decades. Financial markets in 2026 are expressing concerns not only with the direction of U.S. policies but also doubts that even if public sentiment decides not to go forward with current changes, the elements of U.S. democracy may no longer be sufficiently resilient to express the people’s will. And so investors are beginning to hedge against that possibility, too.
U.S. producer prices climbed 0.5% on month in January, 0.2 percentage points more than forecast and following a 0.4% monthly increase in December. Their 2.9% rise compared to January 2025 was 0.3 percentage points greater than expected and the fifth straight month to show a 12-month increase of 2.8% or more. Year-on-year producer price inflation when excluding food and energy rose to a 10-month high of 3.6%, while the 3.4% core measure excluding trade as well as food and energy was 3.0% or higher for a sixt straight time.
This final business day of February 2026 also saw a huge number of other data reports being released.
A string of three straight monthly declines in U.S. construction spending totaling 0.7% was interrupted in December with a 0.3% uptick, but spending was still 0.4% lower than in December 2024 and recorded an average 1.4% drop in 2025.
Canadian GDP, which had rallied last summer, posted a 0.2% decline in the year’s final quarter that trimmed full-2025 growth to 1.7%.
Swiss GDP rose 0.2% last quarter and recorded year-on-year growth of 0.8%. GDP grew 1.4% in 2025, similar to 1.2% in the prior two years.
French GDP growth last quarter of 0.2% matched the preliminary estimate, but the expansion compared to a year earlier got revised up to a 7-quarter high of 2.3%. In contrast to the aforementioned 2.9% rate of U.S. PPI inflation, French producer prices in January were 2.3% below their year-earlier level. France also reported a 1.0% rate of consumer price inflation in February. Finally, household spending in France recorded the largest monthly rise (0.5%) in 13 months during the month of January.
Released German economic statistics today combined an unchanged 6.3% unemployment rate with news that consumer price inflation in February had slowed more than predicted to 1.9%. But service sector price inflation remained unchanged at 3.2%. ECB officials want to see lessening service sector price strains before considering any further interest rate cuts.
Japanese industrial production rose 2.2% in January but had been expected to rebound even more sharply from prior declines. The monthly rise in retail sales of 4.1%, however, was more than twice what had been expected. compared to a year earlier, production and sales respectively rose 2.3% and 1.8% in January. All broad measures of Tokyo consumer price inflation in February were lower than January readings. Tokyo’s overall CPI slowed to a 16-month low of 1.8%. Excluding fresh food, it fell 0.2 percentage points to 1.8%, and CPI excluding both food and energy of 2.6% was 0.3 percentage points lower than in January. Japanese housing starts fell 0.4% year-on-year in January (their ninth drop in ten months), while construction orders rose 5.7% (their 8th increase in the same 10 months).
Some of the other countries reporting GDP growth today include India, where activity exceeded a year earlier by 7.8% in 4Q; Portugal where GDP posted year-on-year rises of 1.9% in both 4Q and 2025; Sweden whose GDP advanced on-year by 2.1% in 4Q and 1.5% in 2025; Iceland whose GDP fell 0.6% on year in 4Q and by 1.0% in full-2025; Finland with on-year growth of only 0.1% in the latest quarter; Bulgaria where GDP rose 0.2% last quarter and recorded on-year increases of 1.0% in both 4Q and 2025; and Latvia where a 2.9% on-year increase in 4Q was the most in 11 quarters and helped growth in 2025 as a whole of 2.1% to compared quite favorably with -0.4% in 2024. India’s growth last quarter exceeded expectations by a significant margin, encouraging officials there to left their projected growth for the fiscal year ending next month to 7.6% from a previous estimate of 7.4% and an actual 7.1% in the last fiscal year.
Britain had some adverse political news, as the ruling Labour Party lost a previously considered safe parliamentary seat in a special election. British consumer confidence unexpectedly slipped three index points deeper into the red this month with a 3-month low reading of -19. The Nationwide index of British house prices recovered slightly from a 20-month low pace of just 0.6% to a year-on-year 1.0% in January.
Mexico’s trade position deteriorated more sharply than seasonal weakness would explain in January. The deficit of $6.48 billion was about triple analyst expectations and exceeded a January 2025 deficit of $5.2 billion.
Among other price data on today’s menu,
- Portuguese consumer price inflation rose to 2.1% in February from January’s 10-month low of 1.9%.
- Filipino PPI inflation of 1.5% in January was at a 32-month high.
- Belgian PPI inflation (-0.6% in January) was negative for a fourth straight month.
- In Singapore, a 6.0% on-year drop of producer prices in January was the most in 16 months.
- Spanish consumer prices rose by a bigger-than-forecast 0.4% between January and February but posted an unchanged 2.3% year-on-year increase.
- Slovenian consumer prices were 2.9% higher than a year earlier in February.
- Greek PPI inflation, which peaked at 48.8% in the spring of 2022, posted a 76-month low of -3.7% in January.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Canadian and Swiss GDP, German and French CPI, U.S. PPI
ShareThis
