Gasoline Squeeze Threatens Goldilocks Balance

The U.S. gasoline stockpiles fell by 1.6 million barrels last week, while refinery output slipped to 96.5% capacity. This mismatch could push pump prices up by 5%, adding about $0.20 per gallon and feeding into inflation pressures.

AI chip shortages are expected to stretch into 2030, with SK Hynix now anticipating a high-bandwidth memory shortage until around that time. TSMC's advanced packaging capacity remains fully booked through 2027, leaving tech stocks exposed to supply-chain limits.

The Canadian jobs report could overshadow Fed cues, as a weak employment report on Friday could widen the policy gap between the Bank of Canada and the Federal Reserve. This could push Canadian mortgage rates higher, given U.S. wage growth is stuck at 4% and the Canadian dollar near 1.40 per USD.

Markets are betting on a Goldilocks scenario, with growth strong enough to keep the Federal Reserve on hold but not so hot it risks overheating. However, the emerging gasoline squeeze could disrupt this balance by reigniting inflation just as the Fed declares mission accomplished.