The Federal Reserve’s monetary policy committee on Tuesday said U.S. inflation is below target levels, and that it was "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate."
The Labor Department on Friday reported 12-month inflation at 1.1 percent, and that core inflation, which exludes volatile food and energy prices, was 0.9 percent — the smallest increase since January 1966. The level, while the same since April, is below the Feds target range of 1-2 percent.
"Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability," the FOMC statement said.
The cost of living in the U.S. rose in August for a second month in a row as energy and food prices continued to climb, the government reported Friday. The 12-month inflation rate rose as well, but the annual core number remained below preferred Fed levels which keeps conversations of deflation circling.
The Consumer Price Index rose 0.3 percent in August, matching the July increase after a dip of 0.1 percent in June, data from the Labor Department showed.
Leading August increases was a 2.3 percent rise in energy prices, with gasoline costs at the top. Read more