There’s a lot of hurricane damage to come between the Fed and its next interest rate hike.

Hurricane Harvey has already heated up inflation, hit industrial production, and dampened retail sales, and that was just the late August data — before Hurricane Irma rampaged across Florida this month.

Economists expect the storms to shave a half percent or more off third quarter GDP and temporarily boost inflation, including higher gasoline prices and building materials costs. That makes whatever the Fed says about the impact of the two monster hurricanes in the coming week potentially more interesting than its expected announcement on how it will begin unwinding its massive $4.5 trillion balance sheet.

The Fed’s meeting Tuesday and Wednesday is the highlight of the week ahead. There are also a few economic reports, including housing starts Tuesday and existing home sales Wednesday. Jobless claims Thursday should again be elevated, with the impact now of Hurricane Irma which caused the evacuation of Florida’s coasts and other parts of the Southeast.

Economists expect the economic impact of the hurricanes to be temporary before a rebound as the damaged areas begin to rebuild.

For Fed watchers, the hurricanes have changed the dynamic in a number of ways. One is that the Fed could be more concerned about a weaker economy, particularly if there are further storms.

Another is that the Fed could now see inflation move higher, even if temporarily, and that has been the missing ingredient for further rate hikes. The Fed has targeted 2 percent inflation and the personal consumption expenditure deflator, which it watches closely, was at 1.4 percent in July. August CPI inflation year on year rose to 1.9 percent, from 1.7 percent in July.

Besides its comments on storms and inflation, the market will be watching to see what the Fed does with its forecasts for interest rates. The Fed presents its forecast in a “dot plot,” or chart with each Fed member’s forecast appearing as an anonymous dot. The Fed interest rate forecast currently shows one more interest rate hike this year and three next year, while market expectations are barely for one.

After August’s surprising jump in consumer prices, the market’s view of whether the Fed could raise rates this year changed with now near 50 percent odds being given for a December interest rate hike. A week ago, that number was closer to 20 percent.

“The Fed has been saying the decline in inflation is completely transitory. I think they’re going to want to see two more data points, and they’ll see it in October and they’ll see it in November,” said Jim Caron, fixed income portfolio strategist at Morgan Stanley Investment Management. Caron expects the Fed to raise rates in December, as do many economists.

Goldman Sachs economists see a 60 percent chance of another hike this year, even after the estimated $100 billion in damage from the hurricanes. They note that the Fed kept its growth forecasts unchanged following Hurricane Katrina and continued on a rate hiking cycle.

“While a hurricane-related slowdown could cloud the data and raise doubts about the underlying pace of growth, strong recent momentum provides a bit of a buffer and Fed officials should be able to isolate hurricane effects in the data to some degree,” wrote the Goldman economists in a note.

At the end of its meeting, the Fed is expected to announce that it will slow down the monthly purchases it makes to replace the maturing securities on its balance sheet. This is a move into uncharted territory as the Fed takes steps to begin reversing the asset purchases it made as part of the extraordinary quantitative easing program it created to save the economy during and after the financial crisis.

The first reduction is expected to be $10 billion a month, and the Fed will taper that back further after three months. Many strategists expect little to no market impact in the early stages of the program, which has been well broadcast by the Fed.

“The markets don’t necessarily care in the near term because the discussions are that it’s like watching paint dry. It’s going to start in a slow manner when it starts. It’s going to take a year to ramp up,” Caron said.

The Fed meets as the Dow comes off its best week since December. It closed at a record high of 22,268, up 2.2 percent for the week. The S&P 500 closed at a record 2,500, up 1.6 percent for its best week since early January. The Nasdaq rose 1.4 percent for the week, closing at 6,448, about 12 points below its record close.

Ed Keon, portfolio manager with Quantitative Management Associates, said he has become more bullish on stocks and upped his holdings of U.S. stocks to neutral weight. He said there are several positives: the fact that the debt ceiling issue has been resolved for now, that there seems to be progress on tax breaks and that the president was able to compromise with Democrats. He also said earnings should continue to be strong in the third quarter.

“I think the recent cooperation between the president and the Democrats gives us a chance of having some fiscal policies that would be really pro-growth. If the president tries to pass it only with Republican votes, you may get some changes but they’re unlikely to provide much of a fiscal boost to the economy,” he said.

Washington will be a major focus in the week ahead, as the Trump administration and congressional leaders head toward unveiling a tax plan in the week of Sept. 25.

North Korea will remain a focus, as Trump speaks before the United Nations on Tuesday.

Monday

10:00 a.m. NAHB survey

4:00 p.m. TIC data

Tuesday

8:30 a.m. Housing starts

8:30 a.m. Import prices

8:30 a.m. Current account

Wednesday

10:00 a.m. Existing home sales

2:00 p.m. FOMC statement

2:30 p.m. Fed Chair Janet Yellen press briefing

Thursday

8:30 a.m. Initial claims

8:30 a.m. Philadelphia Fed manufacturing

9:00 a.m. FHFA home prices

Friday

9:45 a.m. Manufacturing PMI