The Fed is expected to mention inflation in the statement it releases after its meeting Wednesday afternoon, and Yellen is likely to discuss it in what will be her final briefing before handing over the top job to Jerome Powell in early February.

The sluggish pace of inflation has been a perplexing issue for Fed officials, who have said they see it as a transitory issue but also a concern. Fed Chair Janet Yellen has also

The consumer price index was expected to have risen 0.4 percent in November, or at a year-over-year pace of 2.2 percent. The Fed's target is 2 percent, but its preferred measure, the PCE deflator, is still lagging. Core CPI, without food or energy, is expected to climb by 0.3 percent, or 2 percent year over year.

The mystery of low inflation won't be solved before the Fed's expected vote to raise interest rates Wednesday, but an early morning report on CPI should show a bump up in consumer prices.

"They tend to understate what they say about inflation. They don't want to make a bold statement. They're still confused. There's not a unanimity of opinion," said Ward McCarthy, chief financial economist at Jefferies. "They may refer to it as showing signs of stabilizing."

The Fed is also expected to raise its GDP forecasts slightly but expected to be approved by Congress before the end of the year.

"The surprise we have to look for is how the Fed may interpret tax changes going forward. They have had three rate hikes for 2018. Does this move them to four? There's a very low threshold to move up to four hikes. It just takes three voters," said Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management.

The Fed presents its interest rate forecast on a chart, called the "dot plot," which includes the anonymous forecasts of each Fed official.

The Fed's chart shows three rate hikes for 2018, but the market is barely expecting two, and one big reason is the lack of inflation.

"The core CPI over the course of this year has run between 1.7 percent and 2.3 percent, which is a little bit on the soft side, but I don't think it's reason to batten down the hatches on the inflation side. It's going to be back above 2 percent in 2018, and it was above 2 percent for all of 2016," said McCarthy.

"I think some of the anxiety about the inflation picture is overblown," McCarthy said. "I think inflation is going to accelerate." He said hurricane damage to homes in Florida and the South and fire damage on the West Coast should push up the cost of shelter and building materials.

NatWest Markets economists expect headline CPI rose by 0.5 percent.

"The energy component of the CPI could have registered a 3.3 percent spike in November, on the back of higher gasoline and electricity prices," note the economists. Food costs within CPI are also expected to have increased by 0.2 percent in November, after being flat in October.

The NatWest economists expect core CPI rose 0.23 percent, about the same as October. In November data, used car prices are expected to rise, apparel is expected to be up, and new car prices are expected to be unchanged, they said. But two rent categories, primary residence rent and owners' equivalent rent, could have risen by 0.3 percent, and hotel rates could be up 1 percent.

As the Fed releases its statement at 2 p.m. ET, Congress is holding a hearing on the tax plan, which is expected to be headed for a vote by the end of next week.

According to Dan Clifton, head of policy research at Strategas, the conferees as of Tuesday afternoon were discussing implementing the corporate tax cuts in 2018, after leaning toward 2019 earlier in the week.