The Fed meets this week, which means a light primary market calendar of $4.3 billion. The FOMC probably won’t raise rates and its post-meeting statement is likely to write off first quarter GDP weakness as transitory. But inflation is a different matter. With year-over-year core PCE seen at or near 2%, its statement will acknowledge rising inflation, and perhaps even applaud meeting its dual mandate of maximum employment and stable prices. Many Fed speakers acknowledge a possible coming overshoot on inflation, but that won’t derail the expected gradual rate hikes over the next two years.

VOICEOVER: The Fed meets this week, which means a light primary market calendar of $4.3 billion.

The FOMC probably won’t raise rates and its post-meeting statement is likely to write off first quarter GDP weakness as transitory. But, inflation is a different matter.

With year-over-year core PCE seen at or near 2%, its statement will acknowledge rising inflation, and perhaps even applaud meeting its dual mandate of maximum employment and stable prices.

Many Fed speakers acknowledge a possible coming overshoot on inflation, but that won’t derail the expected gradual rate hikes over the next two years.