Rates inched higher Tuesday as concerns about rising inflation hurt mortgage-backed securities. This morning, the May Consumer Price Index (CPI) rose 0.4%, above the consensus forecast of 0.2%, and was 2.1% higher than one year ago. Core CPI, which excludes volatile food and energy components, increased 0.3%, a bit higher than expected. Core CPI has now reached the Fed’s target level for core inflation of 2.0%. Also this morning, May Housing Starts fell 6.5% to 1.001 million annual units, below expectations. Building Permits, a leading indicator, showed a similar decline. The Fed began its two-day meeting to discuss monetary policy today. The Federal Open Market Committee will issue a policy statement tomorrow afternoon. No other key data will be released today.