The FOMC meets this week and must address the inflation data being reported.

The FOMC meets this week with no expectation they will change their current accommodative monetary policy positions. The key issue is how they will react to the inflation data of the last three months. The core PCE price index is up 3.1% year-over-year with the core rates for both the CPI and PPI up even more. The Fed has said their target is 2%. They have also said they expect inflation above their target for some period because it ran well below their target for the past ten years. They also recognize the huge inflation numbers reflect the low base of last year when the economy was shut down and the re-opening of economic activity this year.