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    In January, the seasonally adjusted U.S. core CPI index rose to 332.79 from 331.86 previously

    by VT Markets
    /
    Feb 13, 2026
    The United States core Consumer Price Index (CPI), seasonally adjusted, increased in January. It rose to 332.79 from 331.86 in the prior period. This move shows a month-over-month rise in core CPI. The data covers January and is reported in index points. Core inflation in January was higher than expected, with a 0.28% monthly gain. This suggests underlying price pressure is not easing as fast as hoped. As a result, the market is now seriously questioning whether the Federal Reserve will cut rates in the first half of the year. This inflation report adds to the recent labor market data, which showed strong job growth well above forecasts, with more than 225,000 jobs added. Together, these reports suggest the economy may be running too hot for the Fed. This is a shift from much of 2025, when the data pointed to steady cooling. Expect the forward interest-rate curve to move higher in the coming weeks. This makes trades that benefit from later rate cuts more appealing, such as selling SOFR or Fed Funds futures in the summer contracts. Also expect interest-rate volatility to rise. The MOVE index, now near 95, could move up from these levels. For equities, this increases the risk of a pullback as higher discount rates weigh on valuations. Consider buying protective puts on broad indices like the SPX and NDX. Implied volatility, measured by the VIX, may rise from recent lows near 14, which can support long VIX positions. A more hawkish Fed would likely strengthen the U.S. dollar versus other major currencies. This supports long-dollar strategies, such as call options on the U.S. Dollar Index (DXY). The U.S. outperformance story seen in late 2025 appears to be gaining momentum again.

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