In a twist of fate that defied superstitious dread, this 'Friday the 13th' has delivered a lucky break for financial markets. The U.S. Bureau of Labor Statistics (BLS) released highly anticipated data on Friday, February 13, 2026, revealing that the Consumer Price Index (CPI) for January cooled significantly to 2.4% year-over-year. This critical reading came in below the market consensus of 2.5% and marked a meaningful deceleration from December's 2.7% print. The cooler-than-expected inflation data has immediately ignited a 'risk-on' rally across asset classes, sending Treasury yields plunging and propelling Bitcoin back above key psychological resistance levels as investors aggressively price in a dovish Federal Reserve pivot for the remainder of 2026.
January 2026 CPI Report: Breaking Down the Numbers
The latest data from the BLS paints a picture of disinflation gaining traction after a sticky end to 2025. While Wall Street economists had braced for a headline inflation rate of 2.5%, the actual 2.4% figure suggests that price pressures are abating faster than anticipated. On a monthly basis, the headline CPI rose just 0.2%, undershooting the 0.3% forecast.
Core CPI, which strips out volatile food and energy prices and is closely watched by the Fed, aligned with expectations at 2.5% year-over-year, down from 2.6% in the previous month. This alignment in Core CPI, combined with the drop in headline figures, has reassured markets that the 'last mile' of the inflation fight is being won without crushing economic growth. The report highlighted softness in energy and used vehicle prices, effectively offsetting persistent but stable shelter costs.
Fed Rate Cut Outlook 2026: June Cut Now '83% Likely'
The immediate reaction in the interest rate futures market was nothing short of dramatic. Prior to the release, traders were hesitant, with the probability of a mid-year rate cut hovering below 50% following a strong jobs report earlier in the month. However, the fresh CPI January 2026 results have completely flipped the script.
According to the latest data from the CME FedWatch Tool, the odds of a Federal Reserve interest rate cut in June 2026 have surged to approximately 83%. Market participants are now pricing in a high probability of three separate quarter-point reductions by the end of the year. The bond market validated this dovish shift, with yields on the 2-year and 10-year Treasury notes tumbling as traders rushed to lock in rates before the Fed begins its easing cycle. This rapid repricing suggests that the central bank's 'risk management' strategy will likely pivot from fighting inflation to supporting labor market stability in the second half of the year.
Bitcoin Price Rally Today: Crypto Rides the Risk-On Wave
Crypto markets, which had been battered by a sharp 'AI-driven rout' in equities just nearly 24 hours prior, seized on the CPI news as a green light for recovery. Bitcoin (BTC) staged an impressive reversal, climbing sharply as the dollar weakened and risk appetite returned. The correlation between crypto assets and global liquidity expectations remains tight; as the prospect of cheaper capital in 2026 becomes clearer, digital assets are acting as a primary beneficiary.
Analysts point to the 2.4% inflation print as a 'Goldilocks' scenario for Bitcoin. It is low enough to justify Fed liquidity injections but not so low as to signal a recessionary collapse. This sweet spot has emboldened bulls, pushing Bitcoin price action to challenge overhead resistance established during the late-2025 consolidation. With institutional outflows stabilizing and the macro headwinds fading, the path of least resistance for the crypto market volatility appears to be to the upside heading into the weekend.
Stock Market Rebounds: Tech and AI Sectors Stabilize
The equity markets also breathed a collective sigh of relief. Thursday had seen a punishing sell-off driven by fears over AI sector valuations, but the CPI surprise provided the perfect antidote. The Dow Jones Industrial Average rebounded over 200 points in early trading, while the S&P 500 and Nasdaq Composite clawed back significant losses.
Specific movers highlighted the market's discerning nature. While the broader index rallied, individual stock performance remained tied to earnings execution. For instance, Applied Materials surged on robust earnings, signaling that infrastructure demand remains healthy despite broader jitters. Conversely, companies with soft guidance like Pinterest and DraftKings faced selling pressure, indicating that while the macro tide is rising, investors remain selective. However, the overarching narrative for Friday remains clear: the threat of sticky inflation has receded, clearing the runway for a bullish continuation in 2026.
