The surprising inflation data did not move markets as it would have in the past.

The Federal Reserve has acknowledged inflation data will be elevated as the economy re-opens from the restrictions of the pandemic. They cite the low base from 2020 as the economy shut down and depressed consumption, the huge amount of fiscal stimulus added in the first four months of 2021, and the disruption in the supply chain from trying to re-open economic activity as the drivers of higher prices. They consider these factors as transitory which will smooth over time. Therefore, temporary pricing pressures will ease later this year. They have said they will not taper the bond purchase program of $120 billion per month or consider raising managed rates until they determine the base of economic activity and pricing levels not being driven by the temporary conditions. It is not clear whether the Fed anticipated the magnitude of the surge in inflation reported last week.