The Federal Reserve has made plain its commitment to preserving price stability, and I am confident that we would act decisively to counter any deterioration in longer-run inflation expectations that threatened that objective. Summary and policy implications The evidence and analysis I have just reviewed suggest that the recent pickup in price increases probably does not represent the leading edge of steadily worsening inflation.
But, thereafter, during 2010–12, the real average per capita expenditure has remained significantly positive. Moreover, there is greater allocation of expenditure away from cereals towards other forms of food items such as protein and vegetables (Table). Hence, demand seems to be one of the factors driving the prices of protein and vegetables.