The U.S. Bureau of Labor Statistics released data on February 13, 2026, showing the Consumer Price Index (CPI) increased 0.2% month-over-month in January, compared to 0.3% previously. Core CPI rose 0.3% month-over-month, up from 0.2%. Year-over-year, CPI was 2.4%, down from 2.7%, while core CPI came in at 2.5%, slightly lower than the previous 2.6%.
The key takeaway is that the year-over-year CPI figure of 2.4% was below market expectations of 2.5%, with the main cooling contributions coming from energy prices and used vehicles. The 0.3% monthly increase in core inflation met expectations. Shelter costs showed a moderate trend, while increases in some service prices persisted.
Despite the cooling inflation, overseas markets still consider two rate cuts within the year, starting from June, as the most probable scenario. This expectation is influenced by stabilizing non-farm payroll data and recent commentary from Federal Reserve officials. Following the data release, the 2-year U.S. Treasury yield decreased slightly by 3.4 basis points to approximately 3.41%, while the 10-year yield fell by 3.6 basis points to around 4.06%.
A detailed breakdown reveals the following: 1) The U.S. CPI energy index fell 1.5% month-over-month in January, a significant cooling factor compared to the previous 0.3% increase. Energy commodities dropped 3.3%, with gasoline down 3.2% and fuel oil falling 5.7%. Energy services rose a modest 0.2%, with electricity down 0.1% and utility gas service increasing 1.0%. Notably, Brent crude oil prices have rebounded from around $63 per barrel in January to $71 per barrel as of February 12th. Given the approximate one-month lag in the transmission of international oil prices, recent energy components face potential upward pressure.
2) Food price increases remained moderate. The food index rose 0.2% month-over-month. Food at home increased 0.2%, while food away from home rose 0.1%. Following tariff reductions, beef prices fell 0.4%, while the overall meats index rose 0.6%. Egg prices continued their decline post-avian flu impact, falling 7.0%.
3) Core CPI rose 0.3% month-over-month. Shelter costs slowed, but price increases persisted for some services. The shelter index increased 0.2%, with owners' equivalent rent and rent of primary residence both rising 0.2%. After the holiday season, the lodging away from home index turned negative, declining 0.1%, with other lodging like hotels falling 0.5%. The overall services index rose 0.4%, with medical care services up 0.3%, transportation services surging 1.4%, and recreation services increasing 0.4%. Personal care prices saw a significant rise of 1.2%.
4) Tariff-sensitive goods showed mixed trends, while new and used vehicle prices were suppressed by cooling demand. The commodities index excluding food and energy was unchanged month-over-month. New vehicle prices rose 0.1%, while used cars and trucks fell 1.8%. The expiration of U.S. electric vehicle tax credits may be dampening demand and price transmission. Apparel prices rose 0.3%, household appliances jumped 1.3%, furniture and bedding increased 0.7%, and toys rose 0.2%.
Following the data release, the 2-year U.S. Treasury yield decreased slightly by 3.4 basis points to approximately 3.41%, while the 10-year yield fell by 3.6 basis points to around 4.06%. The U.S. dollar index showed little movement, remaining near 96.9.
Recent comments from Fed officials on February 11th pointed towards a delayed start to rate cuts. Comments suggested a patient approach, potentially maintaining the current rate level for some time, and emphasized the need for substantial softening in the labor market before considering cuts. Despite ongoing inflation cooling, overseas market expectations for rate cuts have changed little, with CME data still reflecting a high probability of two rate cuts commencing in June.
Risk Warning: Overseas policy changes.