Economic Indicators (Source: Scotiabank)
Warm Core CPI, Tame Core PCE—What’s the Fed to Do?
Sep 11, 2026
US CPI inflation landed on Scotia’s house expectations in terms of headline inflation (0.4% m/m) and core CPI (0.3%). Core was above consensus at 0.29% m/m SA and 3.5% m/m SAAR (chart 1). I’ll explain why it shouldn’t matter to the Fed but probably will.
The Fed is likely to hike 25bps next week even though there remains a solid case for whiffing. Today’s CPI numbers and yesterday’s producer prices continue to point to tamer core PCE inflation over recent months after doing the proper conversions.
So why hike? The strongest argument is that Chair Warsh has probably boxed himself in with his high deference to markets. He is likely to take the roughly 21bps pricing and deliver on a 25bps hike and with enough support on the Committee. To do otherwise would curiously ease financial conditions and go against his hawkish-sounding narrative; if you don’t hike when it’s priced, then when? Yet I believe that hiking would be policy error.
Key is how these figures translate into what we used to understand as the Fed’s preferred inflation metric: core PCE. Our math shows core PCE inflation likely to land at 0.2% m/m SA when we get the figures ....     More >>

Featured Insights (Source: RBC Financial Group)
New U.S. tariff retaliation: What it means for Canada’s economy
Sep 9, 2026
The U.S. administration’s latest response to Canada’s retaliatory tariffs following the breakdown of bilateral trade negotiations may sound alarming, but they represent a relatively minor escalation in the trade war.
New U.S. measures include:
- Changes to the list of Canadian products targeted with 50% import tariffs in August, effective September 15. New products have been added to the previous Section 338 tariff list, but some products have also been removed—roughly balancing out the dollar value of imports.
- A subset of products (alcoholic beverages, dairy products, and certain motorcycles) previously targeted with 50% tariffs will now be subject to an outright import ban as of Sept. 29.
- President Trump also posted on social media that the U.S. will work to remove Canadian products from some government procurement contracts.
While the announcement sounds dramatic, this next layer of measures could have been worse compared to what’s been imposed, according to our estimates.
Section 338 tariffs continue to affect ....     More >>

TD - The Weekly Bottom Line - Sep 11, 2026
Canadian Highlights
- The U.S.-Canada trade dispute continued this week. While the latest tariffs will cause pain for affected businesses, it should not materially add to the drag on Canada’s economic growth.
- Canadian household wealth marked its eleventh consecutive quarterly gain, breaching the $19 trillion mark; it should support the recent resilience in consumer spending.
- Next week’s inflation report will show whether higher energy prices are spilling over into broader inflation. Markets are pricing in at least one interest rate hike from the Bank of Canada this year, but we think that looks overdone.
U.S. Highlights
- U.S. Treasury yields approached their post-pandemic high as oil prices briefly surpassed $100/barrel.
- August producer and consumer inflation picked up on the back of higher energy prices, while core inflation pressures also firmed.
- Markets raised the implied probability of a rate hike to roughly 90% ahead of next week’s Federal Reserve meeting.