Pricing pressures are hot, primarily at the producer level. After months of below-target readings, mainstream measures of inflation are rising as well, compared to the deflationary lows of the pandemic. Still, we don't think the U.S. Federal Reserve will change its approach to low interest rates, and Chairman Powell has said that the central bank will let inflation rise above its 2% target in exchange for a continued decline in unemployment. We track 17 inflation measures on a monthly basis. On average, they indicate that prices are rising at an 8.0% rate, below last month's reading, as some producer-price gauges are cooling. But drilling down to core inflation, our reading is 3.0%, with the all-important five-year target rate at 2.2%. The big increases in recent months have indeed come at the producer level, as the PPI for intermediate unprocessed goods, for example, is now 50% and the PPI for intermediate processed goods is 23%. Much of this price activity is driven by the recent recovery in commodity prices, including oil (which has more-than tripled year-over year). The Fed's inflation forecasts now call for a core inflation reading of 3.4% in 2021 and 2.1% in 2022.