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Originally published June 18, 2014 at 12:09 PM | Page modified June 18, 2014 at 1:33 PM

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Fed's Yellen downplays long-term inflation risk

Federal Reserve Chair Janet Yellen is downplaying concerns about rising inflation despite recent signs that price increases are picking up.


AP Economics Writer

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WASHINGTON —

Federal Reserve Chair Janet Yellen is downplaying concerns about rising inflation despite recent signs that price increases are picking up.

Consumer prices have risen 2.1 percent in the past 12 months, the Labor Department said Tuesday. If maintained over time, that rate would exceed the Fed's target for inflation of 2 percent and signal a potential need to raise short-term interest rates from near zero.

Higher rates could possibly limit economic growth. But at a news conference, Yellen is suggesting that rising inflation may prove temporary. "The data that we're seeing is noisy," she says.

Fed officials closely monitor a separate inflation measure. That index amounted to 1.6 percent in April. Fed officials project that inflation will stay at or below the 2 percent target through 2016.



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