US CPI January Fed Wait and See Approach

US January 2026 CPI data showed headline inflation at 0.2% and core at 0.3%, leading CIBC to predict a Federal Reserve rate cut in June and July. Market reactions were dovish, with both bond yields and the US dollar declining.

Key Takeaways

• 1.Headline CPI for January 2026 rose 0.2% month-over-month, slightly below expectations, while core CPI rose 0.3%, matching forecasts.
• 2.CIBC expects the Federal Reserve to maintain its current interest rate stance until June and July 2026, when it is forecasted to begin cutting rates.
• 3.Inflationary pressures remain subdued due to cooling labor markets and incomplete tariff pass-through, despite potential temporary bursts in consumer activity.

Table of Contents

• Implications & actions
• Distribution
• Miscellaneous

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