Inflation numbers are in and came in much higher than expected. Even the core inflation numbers for both reports were higher than anticipated. Core inflation is intended to exclude some of the most volatile components, including food and energy costs, painting a picture in which the Federal Reserve will need to continue its tightening measures until inflation is under control.

The FOMC Minutes and Consumer Sentiment report were the most impactful calendar items last week, further reinforcing the Federal Reserve’s resolve to bring inflation down to its 2% target rate.

While the Core PCE Index came in at 3.0%, below the expected 3.3%, overall inflation remains well above the Federal Reserve’s 2% target.

With inflation still running above the Federal Reserve’s target, there remains room for rates to stay elevated or potentially increase over the next several rate decisions if the Fed remains focused on restraining inflation.

With a light week the previous week, only a few data reports will have any far reaching impact, with the M2 money supply and the Federal Reserve Balance sheet giving the most insight.