The Fed is focused on inflation
The nagging thing holding back the Fed from hiking is that inflation hasn't materialized despite a tighter labor market and a slightly stronger economy.
The Fed can't afford to wait to raise rates until inflation hits target because monetary policy operates with a lag, but policymakers want to see some sign of upward trajectory.
US CPI is due at the bottom of the hour and is expected to rise just 0.1% y/y while prices excluding food and energy (core) are forecast to rise 1.8% y/y. Canadian CPI numbers are due at the same time and a soft reading there could ignite chatter about another BOC cut.
Finally, at 8:45 am ET, we've got special announcement planned.
