Chicago PMI Smashes Expectations, Reaching Highest Level Since May 2022

The Chicago Business Barometer (PMI) surged to 57.7 in February 2026, significantly exceeding analyst expectations and reaching its highest level since May 2022. This robust performance marks the second consecutive month of economic expansion, driven largely by a post-government-shutdown recovery in business sentiment. Key components of the report showed a substantial rise in new orders and employment, indicating strong underlying demand within the regional economy. However, the prices paid index also accelerated, suggesting that inflationary pressures remain persistent despite restrictive monetary conditions. This combination of strong growth and rising costs may complicate the Federal Reserve's path toward interest rate cuts, providing support for the US Dollar (DXY) and Treasury yields. Market participants are now closely monitoring how this strength in soft data will translate into broader national manufacturing figures.