Jiahu Capital: Risks facing the dual mandate of the Federal Reserve are increasing.

According to CIBC Capital Markets, the risks have increased for the Federal Reserve in its dual mandate of maximizing employment and stabilizing prices, but the bank continues to expect the Fed to maintain interest rates in 2026. The bank stated in a report: "We believe that the recent energy price shocks are not enough to push rate hikes onto the agenda, but it may help the Fed to remain cautious." The longer the energy price shocks persist, the more concerned CIBC Capital Markets will be about the downside risks to economic growth. "We believe the Fed will also view this issue from the same perspective." Looking ahead to 2027, as inflation falls more sustainably towards target levels, the Royal Bank of Canada expects the Fed to conduct three 25 basis point "normalization" rate cuts.