-Janet Yellen, Fed Chair
Wholesale prices in the US rose more than expected last month as the cost of fuel increased, reinforcing the view inflation is slowly climbing from historically weak levels. The producer price index, measuring prices at which companies sell goods and services, picked up to a seasonally adjusted 0.4% in June following the 0.5% rise in the preceding month, according to the Labor Department. At the same time, core prices, which exclude volatile energy and food components, increased 0.3% in the reported month, marking the biggest leap since October last year. A broad pickup in prices would reinforce the case for the Fed to begin lifting interest rates this year, as the central bank is keeping a close watch on inflation trends as a part of its dual mandate. The personal consumption expenditures index, the Fed's preferred inflation measure, climbed 0.2% in May from a year earlier and has been below the Fed's 2% target since May 2012.
Janet Yellen, the Fed Chair, said that Fed officials expect growth "to strengthen over the remained of the year and the unemployment rate to decline gradually". If the economy performs in line with central bankers' expectations, it will be appropriate at some point this year to start raising the benchmark funds rate. Yet, Yellen underlined that the timing of the rate hike is less important than the subsequent path of increases, which are expected to be gradual.
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