The view that inflation is temporary continues to drive the bond market and the Fed.

The FOMC meeting did have an impact on financial markets last week. Stocks declined and bond prices increased. The Fed did not change its current accommodative monetary policy position and did not issue any real change in guidance as to future policy timing. They continued to call the current inflation data as temporary and expects the current pricing pressures to abate later this year. There was acknowledgment that the current data is higher than they had been forecasting, but they cited the easing of economic restrictions as the pandemic is receding and a smoothing of the supply chain bottlenecks as reasons they believe inflation will settle.