January CPI cooled more than expected, and the immediate market consequence was lower Treasury yields—easing borrowing-cost pressure even as stocks finished a choppy, mixed session.
What changed in the January CPI report
The U.S. Bureau of Labor Statistics reported Friday, February 13, 2026 that the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in January on a seasonally adjusted basis, and was up 2.4% over the past 12 months. :contentReference[oaicite:0]{index=0}
Core inflation—CPI excluding food and energy—rose 0.3% in January and increased 2.5% over the past 12 months, while the energy index fell 1.5% in January. :contentReference[oaicite:1]{index=1}
Inside the report, shelter rose 0.2% in January and was cited by BLS as the largest factor in the monthly increase, while gasoline prices fell over the month and were down 7.5% over the prior 12 months (not seasonally adjusted). :contentReference[oaicite:2]{index=2}
Market reaction: yields down, stocks mixed
Markets treated the softer headline inflation print as supportive of the case for lower policy rates later in 2026. Treasury yields fell after the data as investors increased their confidence that the Federal Reserve can cut rates without inflation reaccelerating. :contentReference[oaicite:3]{index=3}
U.S. equities were mixed by the close: coverage of the session described major indexes finishing little changed to slightly higher overall, with weakness concentrated in parts of tech even as the bond market rallied. :contentReference[oaicite:4]{index=4}
This “cool inflation / risk-off equities” split matters because it often shows up when investors want rate relief but remain uncertain about earnings momentum—especially in the most expensive parts of the market.
What it means for households and businesses
Lower Treasury yields can filter into real-world rates, particularly for mortgages, auto loans, and business borrowing. The move is not automatic and doesn’t happen evenly, but falling yields generally reduce the baseline cost of credit compared with a week where yields are rising.
At the same time, the CPI details show why consumers may not feel an immediate “all-clear.” Shelter was still a key contributor to monthly inflation, and the report showed price pressure remains uneven across categories. :contentReference[oaicite:5]{index=5}
For businesses, a cooler headline CPI can lower input-cost anxiety and reduce pressure for rapid price increases. But it can also sharpen competition: if demand softens, companies may be forced to discount more aggressively to protect volume.
What to watch next
Investors will be focused on whether the January CPI trend holds as new inflation data arrive, and on how Federal Reserve officials frame the tradeoff between a still-tight labor market and continued disinflation.
The next CPI release (for February 2026) is scheduled for March 11, 2026, according to the BLS release calendar. :contentReference[oaicite:6]{index=6}