02/13/2026
Mortgage rates rallied again this week, pushed lower today by a better-than-expected CPI (Consumer Price Index) report that saw the headline inflation rate fall to 2.39% from 2.65% in December and Core CPI fall to 2.51% from 2.64%. June rate cut odds increased to 70% from 63% after the release of today’s inflation report. Rate cut odds had fallen earlier in the week after a stronger than expected Jobs report was released on Wednesday. 130k jobs were added in January vs expectations of 70k. Private payrolls were up 172k while government payrolls shrunk by 42k. The unemployment rate also ticked down to 4.3% from 4.4%. Government payrolls are down 256k YoY. Private payrolls are up 615k YoY. The Household survey confirmed the Headline numbers, showing 528k jobs added in January. Initial Jobless Claims also refuse to show labor market stress at this moment in time. Initial Jobless Claims fell 5k WoW to 227k. Continuing Jobless Claims did rise by 23k to 1.86mm, but remain well below the peak of 1.97mm during the summer of 2025. An additional interesting note, Construction added 33k jobs in January to an all-time high of 8.31mm employees and turned positive YoY after flirting with a YoY drop for the previous five months. On the downside, Existing Home Sales fell 8.43% MoM, 4.4% YoY, to the lowest levels since 2010.
In equities, markets are still living in fear of AI disruption. The S&P500 is only down ~2.5% from it’s all time high, but under the surface value companies have outperformed growth companies by >15% since November as investors rotate away from companies they see as high risk to AI into more stable companies.
