EXCERPT:
"Top Federal Reserve officials sent a clear signal that the Fed is unlikely to follow the European Central Bank in lifting interest rates from rock-bottom levels anytime soon, playing down the idea that soaring commodity prices will lead to broader U.S. inflation.
At the Economic Club of New York on Monday, Janet Yellen, the Fed's vice chairwoman, said U.S. monetary policy "continues to be appropriate."
Recent increases in prices of oil, grain and other commodities are "unlikely to have persistent effects on consumer inflation or to derail the economic recovery" and are "not likely to warrant any substantial shift in the stance of monetary policy," she said. The key, Ms. Yellen added, is that households and businesses don't expect inflation to take off in the long run.
Speaking in Tokyo earlier, William Dudley, president of the Federal Reserve Bank of New York, said, "We think that it's important not to overreact to a rise in headline inflation because the increase in commodity prices is probably going to be temporary rather than persistent"—a sentiment Ms. Yellen echoed."
