Latest CPI data from the US for January was surprisingly high, raising red flags as far as early interest rate cuts are concerned. Core inflation, at 3.9%, is almost double the Fed’s 2% target. The main culprits were food inflation, which can be volatile; shelter inflation, which remains far too high and needs to be curtailed; and motor vehicle insurance, up over 20% year-on-year, reflecting a post-Covid catch-up by insurers. The market continues to expect the first interest rate cut in June, but the next three months will be critical.