Murphy's Market Minute | February 13, 2026

This week’s focus centered on the January employment report and the latest inflation data, both of which play a critical role in shaping Federal Reserve policy expectations. The labor market remains stable. The economy added 130,000 jobs, well above expectations, while the unemployment rate held steady at 4.3%. Average hourly wages rose 0.4% month over month and are up 3.7% year over year, signaling continued strength without clear signs of overheating. A steady employment environment supports ongoing economic expansion and reduces immediate pressure on the Federal Reserve to ease policy. Inflation data showed continued but gradual progress. Headline CPI increased 0.2% for the month, bringing year-over-year inflation down to 2.4%. Core CPI rose 0.3% month over month and stands at 2.5% year over year, still slightly above the Fed’s 2% target. While the overall trend remains constructive, the data does not yet justify an accelerated shift toward rate cuts. Adding broader context, recent GDP growth came in at a strong 4.4% annualized rate, reinforcing the strength of consumer spending and overall economic activity. With growth solid, employment steady, and inflation moderating but not fully cooled, the Federal Reserve has flexibility to remain patient. Following this week’s data, expectations for near-term rate cuts eased slightly. The Fed’s most recent projections suggest roughly one rate reduction later this year and modest easing into 2026, but the timing will remain dependent on continued progress in inflation. Markets reacted cautiously, with major indices finishing lower from last Friday’s close as investors recalibrated rate expectations rather than responding to economic weakness.