The Fed meets this week with several cross currents driving the discussion. No change in the current level of managed interest rates is expected. This is the meeting which is followed by the press conference and the release of revised forecasts. These will be more important than the statement released at the end of the meeting. We should get some sense of the Fed’s reaction to the hurricane impact to the economy and inflation.

The inflation data from August, prior to the hurricanes, was slightly higher than in prior months and the data for the next two months will be higher, reflecting energy price spikes in gasoline and building materials. The core rate will be higher also since building material cost increases will affect the core. The issue is going to be how the Fed views these weather affected results in their decision about their desired goal of normalizing monetary policy…

ProBank Austin Advisor – September 18, 2017