Sign Up Log in

    Forecasts were met as the US core consumer price index held steady at 2.5% year on year

    by VT Markets
    /
    Feb 13, 2026
    The US Consumer Price Index (CPI) excluding food and energy rose 2.5% year over year in January. This matched the 2.5% forecast. The data shows that underlying inflation stayed steady at the expected rate. There was no gap between the actual result and the market estimate.

    Implications For Fed Policy And Volatility

    January core inflation came in at 2.5% year over year, exactly as the market expected. That removes a major uncertainty for the next few weeks. With no surprise in the data, the Federal Reserve has no new reason to change its current wait-and-see approach to interest rates. As a result, implied volatility in equity index options, measured by the VIX, may fall from the higher levels seen in late 2025 and settle closer to the 13–15 range. If market swings are expected to be smaller, selling options premium becomes more attractive. Consider strategies such as iron condors on the S&P 500, which can profit when the index stays within a set range. After last year’s effort to push inflation down from above 3%, this stable period may create a clearer window for income-focused trades that benefit from time decay. This reading also supports expectations in interest rate markets. Fed Funds futures are now fully pricing in no change at the next policy meeting. The CME FedWatch tool likely puts the odds of unchanged rates above 90%, leaving limited room for bets on a near-term surprise. Rate traders may now look further ahead to the summer meetings to judge when a possible easing cycle could begin.

    Key Risk From Upcoming Employment Data

    Attention now shifts to the next employment report. A stronger-than-expected jobs or wage number could quickly bring inflation concerns back. This CPI report is supportive for now, but market narratives can change fast, as they did after strong labor data in the third quarter of 2025. Any new positions should be managed with the next major economic releases in mind. Create your live VT Markets account and start trading now.

    here to set up a live account on VT Markets now

    In This Article

    see more

    Back To Top
    server
    Click Click Click Click Click
    Follow us on

    Hello there 👋

    How can I help you?

    Chat with our team instantly

    Live Chat

    Start a live conversation through...

    • Telegram
      hold On hold
    • Coming Soon...

    Hello there 👋

    How can I help you?

    telegram

    Scan the QR code with your smartphone to start a chat with us, or click here.

    Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

    QR code