Consumer inflation is expected to have risen slightly in October, but Fed officials are unlikely to see higher prices as a threat for some time.
Consumer inflation used to be a bigger deal for markets, but the Fed has effectively said the current level of inflation does not matter for now.
Fed Chairman Jerome Powell made that clear when he discussed inflation following the Fed's last meeting Oct. 30. At that meeting, the Fed cut rates but indicated it would now stay on hold and watch the economy. The consumer price index is expected to show inflation rose 0.2%, excluding food and fuel. Year-over-year, core CPI is expected to be up 2.4%, the same as September's pace and above the Fed's 2% inflation target. Headline CPI is expected to rise by 0.3% or 1.7% year-over-year.
Powell is expected to discuss the economy, the Fed's outlook and policy when he appears Wednesday. He also speaks Thursday before the House Budget Committee.
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