After a prolonged period of staggeringly low inflation, led by a strengthening dollar and declining energy prices, inflation is back! As measured by the Personal Consumption Expenditure index, the Fed’s preferred inflation index, inflation is 1.3%, and core inflation (which ignores food and energy) is at 1.7%, its highest reading since 2/13, and a level the Fed did not expect to see until late 2016. Hello rate rise in June.