Indeed, the stability of expectations has meant that the price increases driven by costs of oil and other commodities have had only temporary effects on the rate of inflation. Although firms passed higher input costs into their prices when they could do so, those one-time price increases have not led to an expectations-driven process that might have resulted in persistently higher inflation.
The same key factors that have kept core inflation subdued provide the rationale for my inflation forecast. I anticipate that slack in the labor market will continue to restrain growth in labor costs and prices. And, given the stability of inflation expectations, I expect that the latest round of gasoline price increases will also have only a temporary effect on overall inflation.