The Consumer Price Index excluding food and energy has accelerated as well over the past year, but much more modestly than the overall index, to a rate of increase slightly above 2-1/2 percent. Energy prices likely contributed to the price increases of non-energy items through their effect on transportation costs and other inputs to production.
It is our duty, as a central bank, to ensure that the Phillips curve reasserts itself at a steady rate of inflation that is in line with our medium-term objective of below, but close to, 2%. Our mission is not yet accomplished and we must remain patient and persistent. Patience is required for inflationary pressures to show through convincingly in the data.