The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.

Did you notice the government’s latest figures on gas and food prices? If you didn’t know what was going on, it could have given you a “what the heck” moment.

The core US inflation rate or Producer Price Index (PPI) — a measure of the prices of goods excluding food and energy  — rose 0.4% in April, double the increase forecast by economists.

This puts the core US inflation rate up 3% in the past year, the biggest year-over-year rise since late 1991.

The PPI figures are unlikely to affect the markets which, according to a report by MarketWatch, “don’t seem to trust the government’s inflation figures that show falling energy prices in a world of record crude oil prices.”

You can bet there will be a lot of discussion about interest rates this week, thanks to the release of the producer price index (PPI) report tomorrow (Tuesday) and the U.S. Federal Reserve meeting minutes on Wednesday.

The Australian dollar is as strong as it’s been since the beginning of the commodities boom. It takes just one dollar and five Australian cents to buy the greenback.

Silver stuck its nose above $18 for a moment, but obviously someone noticed, as the spike didn’t last long. Volumes were extremely light again yesterday.

German investor confidence, as measured by the think tank ZEW, printed a negative -40.7 versus -32 in March. That whipsawed the euro a bit… But then France printed an inflation report that showed inflation rising at the fastest pace in at least 12 years! OUCH!