US CPI Fuels Fed Wagers, US Inflation Comes In Cooler Than Expected | Real Yield 2/13/2026
Watch on YouTube ↗  |  February 13, 2026 at 23:07 UTC  |  51:29  |  Bloomberg Markets
Speakers
**Scarlet Fu** — Host, Bloomberg Real Yield
**Kathy Jones** — Chief Strategist, Schwab Center for Financial Research
**Alexander Wolfe** — Global Head of Macro/Fixed Income Strategy, J.P. Morgan Private Bank
**Michael McKee** — International Economics & Policy Correspondent, Bloomberg
**Jerry Coghlan** — Generalist Portfolio Manager, TCW
**Matt Brill** — Head of North American Investment Grade Credit, Invesco
**Aaron Weinman** — Credit Reporter, Bloomberg News
**Olivia Fishlow** — Private Credit Reporter, Bloomberg News

Summary

  • Macro Landscape (Feb 2026): The US economy shows a mixed picture with cooler-than-expected CPI but strong job growth (though potentially overstated by ~60k/month). The 2-year Treasury yield has hit lows not seen since Sep 2022.
  • Fed Outlook: Traders are repricing rate cuts; J.P. Morgan expects only one cut this year, while the market is pricing in a 50% chance of a third cut by December.
  • Credit Market Shift: A "Reverse Yankee" bond boom is occurring, with US firms (Alphabet, Goldman) issuing debt in Europe to diversify funding.
  • AI Disruption in Credit: A major divergence is emerging in corporate credit. While indices look stable, spreads are widening significantly for sectors vulnerable to AI disruption (Software, Media, Insurance Brokers), while AI infrastructure (Hardware, Data Centers) remains strong.
  • Private Credit Risk: There is concern over mislabeled "Software" exposure in private credit portfolios, where low-tech firms (e.g., food distributors) are classified as software to justify higher valuations.
Trade Ideas
Ticker Direction Speaker Thesis Time
LONG Kathy Jones
Chief Strategist, Charles Schwab
Kathy Jones notes a "diversification away from the US" and that investors are moving into markets that "have more potential to do better," specifically citing Emerging Markets. Alex Wolfe confirms a pickup in flows into Europe and Japan. The US Dollar is softening (or rangebound), and the Fed is easing (albeit slowly). A weaker dollar historically boosts Emerging Markets and non-US equities as capital rotates out of crowded US trades seeking better valuations. LONG non-US assets to capture the capital rotation. A resurgence in US inflation forcing the Fed to hike, strengthening the USD. 6:16
AVOID Jerry Coghlan
CEO, Pella Capital
Coghlan observes a "real dispersion" in credit markets. While the index is fine, there is a "growing tail of companies in software, insurance brokers, asset managers, and media" experiencing significant price declines in their debt. This is the "AI Disruption" trade hitting credit markets. Investors are "re-underwriting cash flows" for the next 20 years, fearing AI will make legacy business models in these sectors obsolete. If bondholders are selling, equity is likely next or already suffering. AVOID debt and equity of legacy firms in these sectors; they are being repriced for existential risk. AI disruption proves slower than anticipated, leading to a relief rally in beaten-down legacy names. 44:46
LONG Scarlet Fu
Senior Advisor, Wilshire
Applied Materials (AMAT) hit a record high on upbeat sales forecasts. Arista Networks (ANET) is rising on AI networking demand. Nvidia (NVDA) is indirectly tapping debt markets via "Tracked Capital" to lease data centers. While "software" is being sold off due to disruption fears (see above), the "picks and shovels" of AI (Hardware, Semis, Networking) are seeing confirmed order flow. The capex spend is real and accelerating. LONG the AI Infrastructure layer. Over-saturation of supply or a sudden cut in Big Tech capex spending. 44:07
LONG Scarlet Fu
Senior Advisor, Wilshire
"Dip buyers are rushing in to snap up Bitcoin, Ethereum... Coinbase, Circle, and Robinhood are among names drawing attention." Sentiment in the crypto sector is shifting to "bottoming out." When high-beta assets like COIN and HOOD rally alongside the underlying tokens, it signals renewed retail and institutional risk appetite. LONG the Crypto ecosystem as a momentum trade. Regulatory crackdowns or a "risk-off" macro shift (e.g., recession fears). 25:44
LONG Scarlet Fu
Senior Advisor, Wilshire
Shares of real estate services companies CBRE and JLL are rising. This movement suggests a counter-intuitive strength in commercial real estate services, possibly driven by the need for data center build-outs (AI infrastructure) or a stabilization in broader transaction volumes. LONG Real Estate Services as a derivative play on the "return to activity" in physical assets. Commercial real estate valuations collapsing further due to office vacancies. 25:36
LONG Scarlet Fu
Senior Advisor, Wilshire
Rivian reported better-than-expected Q4 metrics and its "first-ever annual gross profit." Achieving gross profit is a critical inflection point for EV manufacturers, signaling they have moved from "cash burn concept" to "viable business model." This fundamentally changes the valuation framework for the stock. LONG on the fundamental turnaround and profitability milestone. Production scaling issues or waning overall EV demand.
LONG Matt Brill
Head of US Investment Grade, Invesco
Google issued a 100-year bond in Sterling. Oracle issued equity to defend its balance sheet. Brill notes, "I love the hundred years... if you get paid." Big Tech firms are locking in capital. Oracle issuing equity to protect its credit rating is a bullish signal for bondholders (prioritizing balance sheet health). The demand for the front-end of tech curves (Google 3-year) is high. LONG Big Tech Investment Grade debt, specifically favoring the front end for safety or the very long end (100yr) only if the yield curve steepens significantly. Tech spreads widening due to massive supply (record issuance). 25:02