The latest on tariffs, inflation, and the job market.
Taking a closer look…
- The US Supreme Court (SCOTUS) ruled against President Trump’s IEEPA tariffs on Friday. This ruling removes broad import duties, reduces costs for businesses, and potentially eases trade tensions.1
- The US unemployment rate unexpectedly ticked down to 4.3% in January 2026 from 4.4% in December, signaling a stronger-than-anticipated labor market. Additionally, US wage growth showed signs of stabilization. Hourly pay was up 3.7% annually. With wages outpacing inflation, households may have more money to spend.2
- Weekly initial jobless claims in the US fell, supporting the "low-hire, low-fire" environment.3 This trend has been a key driver of the continued economic expansion. Employment remains solid and those with jobs continue to spend, propelling the economy forward.
- The stability in jobless claims, combined with a surprisingly strong January payroll, has reduced expectations for immediate interest rate cuts. The US Federal Reserve (Fed) currently maintains its benchmark rate in the 3.50%–3.75% range and markets anticipate fewer cuts in 2026. Higher rates mean higher borrowing costs which can make it more expensive for businesses and consumers to take out loans (think mortgages, auto loans, and business investments).
- Consumer Price Index (CPI) data brought welcome relief with inflation dropping below economists' forecasts.4 The latest release brought on 2 reactions. On the one hand, moderating prices for goods and energy suggest inflation may be easing, which could support future interest rate cuts. On the other hand, concerns remain about pervasive inflation within the service industry and the long-term impact of tariffs, even after the SCOTUS ruling.
- Stock market volatility continued last week as investors weighed earnings against a sharp rise in oil prices. Crude climbed amid heightened US–Iran tensions and a potential military response, keeping markets cautious and adding upward pressure to inflation expectations.
Institutional Portfolio Manager, Strategic Advisers
"The Federal Reserve's future interest rate cuts will be primarily determined by incoming data on inflation, labor market strength, and overall economic growth. As of early 2026, the Fed is taking a cautious, data-dependent approach, balancing slightly elevated inflation with a cooling, yet stable labor market."
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For over 30 years, Strategic Advisers and its dedicated group of seasoned investment professionals have helped clients reach their financial goals. Our team of portfolio managers, with specialized areas of focus in asset allocation and specific asset classes, along with our deep quantitative and fundamental research, drive our investment selection and risk management decisions on behalf of our clients.