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    US initial jobless claims four-week average slips to 219K from 219.5K on February 13

    by VT Markets
    /
    Feb 19, 2026
    The four-week average for initial jobless claims in the United States fell to 219,000 in the week ending 13 February. The prior reading was 219,500. The latest claims report shows the four-week average still near record lows at 219,000. This points to a very tight labor market. That strength likely keeps the Federal Reserve from cutting rates anytime soon. For traders, it supports the “higher for longer” rate view.

    Labor Market And Inflation Keep Fed Restrictive

    This labor strength comes alongside the January Consumer Price Index report, which showed inflation running at a 3.2% annual rate—still well above the Fed’s 2% target. Together, a strong job market and sticky inflation support the case for the Fed to keep policy restrictive going into the March meeting. We should not expect any dovish surprises. This setup looks a lot like much of 2025, when markets repeatedly priced in rate cuts, only to be proven wrong by strong economic data. The current numbers suggest the same pattern may continue, which makes short-term bets on lower rates risky. Patience still looks like the key theme this year. For equity index derivatives, this creates a difficult mix: solid growth can support valuations, but high rates can cap gains. That favors strategies built for range-bound markets or downside protection, such as selling out-of-the-money call options against the SPX. Upside in major indices may stay limited until the data clearly cools. With the VIX near 14, markets look complacent despite ongoing policy pressure. Buying near-term VIX call options may be a relatively low-cost hedge against a sudden shock. A more hawkish Fed tone next month could quickly lift volatility from these depressed levels.

    SOFR Futures And Yield Outlook

    Rates traders should keep watching Secured Overnight Financing Rate (SOFR) futures, since expected rate cuts later in the year may be pushed back further. Continued labor market strength gives bond yields little reason to fall much. Positions betting on a sharp drop in yields are going against the most important data signal right now. Create your live VT Markets account and start trading now.

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