"There's nothing to worry about on the inflation front"
- Bricklin Dwyer, an economist at BNP Paribas
Consumer prices for goods and services in the world's largest economy were flat in December, providing the Fed with more space to prop up the economy by staying on its ultra-easy monetary policy path. The Labor Department said that Consumer Price Index was unchanged last month, after a 0.3% drop in the previous month, held back by a drop in gasoline prices. Overall costs rose 1.7% in 2012, down from a 3% increase in 2011. At the same time, core CPI, which excludes volatile food and energy costs, added 0.1% for the fifth time in the last six months.
"There's nothing to worry about on the inflation front" so the Fed will continue easing measures, said Bricklin Dwyer, an economist at BNP Paribas in New York, who correctly projected the December price readings. "We're seeing weaker domestic demand playing into weaker price pressures."
"There seems to be a pretty strong presumption that we should be aggressive in monetary policy," he said at the University of Michigan's Gerald R. Ford School of Public Policy in Ann Arbor. "We will be paying very close attention to make sure that inflation stays well-contained as it is today."
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