What a week! There were major headlines almost every day — retail sales, jobs data, inflation, housing numbers, and even tariff developments, all landing within a few trading sessions. It was one of those stretches where the market had plenty to digest and very little room to catch its breath. Adding to the confusion was another fresh round of AI-related headlines, this time impacting non-tech sectors like financials and transportation, reminding us that the ripple effects of artificial intelligence are spreading far beyond Silicon Valley. With each new report and theme shift, expectations around growth and interest rates continued to adjust in real time.
On the personal level, consumer spending cooled more than expected to close out the year. December retail sales came in flat, suggesting households continue to become more selective after a long stretch of solid spending. At the same time, the January jobs report showed the labor market is still standing. Employers added more jobs than expected, and unemployment remains relatively low. That said, hiring has clearly slowed compared to last year. The trend is no longer red hot — it’s steady but decelerating. We continue to hear the latest Wall Street slogan of “No Hire, No Fire.” The AI impact continues to be felt near and far
Inflation data added another layer to the story. January’s CPI report showed price pressures continuing to moderate overall, even though some categories remained sticky. Housing activity also stayed soft, with home sales struggling under the weight of higher prices and still-elevated mortgage rates. Meanwhile, tariff revenue has surged sharply over the past year, which has helped federal receipts but also adds a layer of uncertainty depending on how trade policy unfolds from here.
Bringing It All Together
The Federal Reserve’s job is simple in theory: stable prices and maximum employment. In practice, it’s a balancing act. Employment growth has clearly slowed from last year’s pace, and the broader trend remains one of gradual decelerations. Inflation is still running above the Fed’s 2% target on an annual basis, but the underlying components continue to point toward easing pressure.
If inflation continues to trend lower in the coming months while the labor market softens modestly — but does not break — it could give the Fed room to reduce interest rates sooner than expected (current expectation remains for an early summer cut). That type of environment would likely support economic stability and help extend the broader market rally. One final positive note in our view. As the tech and software sell off continues, we are seeing pockets of strength in the small and mid-cap stock space. Generally, that bodes well for investors in well-diversified portfolios.
Interesting to Note: Valentine’s Day is one of the busiest days of the year for restaurants, florists, and even proposal planners. In fact, millions of marriage proposals happen on or around February 14th each year. It’s a simple reminder that while markets move fast, some of life’s biggest moments are built around connection, commitment, and long-term thinking (just like our planning)!
Looking Ahead:
- Further inflation readings will help to confirm whether price pressures are truly cooling or not.
- Fed commentary for clues on potential rate cuts. Next meeting is March 17th-18th, but Fed governors regularly make rounds on the speaking circuit.
- Updates on consumer confidence and spending trends.
- Ongoing trade and tariff developments (What will the Supreme Court decide?).
As always, our focus remains on your long-term plan — not short-term headlines. Have a great weekend.
https://www.cnbc.com/2026/02/10/december-retail-sales-were-flat-missing-expectations.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
https://www.cnbc.com/2026/02/11/jobs-report-january-2026-.html
https://www.cnbc.com/2026/02/11/here-are-the-five-key-takeaways-from-the-january-jobs-report.html
https://www.cnbc.com/2026/02/11/tariff-revenue-soars-more-than-300percent-as-us-awaits-supreme-court-decision.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
https://www.cnbc.com/2026/02/12/january-homes-sales.html
https://www.cnbc.com/2026/02/13/cpi-inflation-report-january-2026.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
Christopher E. Wasson, CFP®
President
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
MosaicAssetPartners.com
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security
