Fed's Yellen: Fed will pay close attention to inflation data in months ahead

Federal Reserve’s Chairwoman Janet Yellen has recognized that inflation has been surprisingly low and expects to hike rates gradually as a strong labor market and a “healthy” global economy lift prices.

“This year’s low inflation could reflect something more persistent than is reflected in our baseline projections”, she said in prepared remarks at the Group of Thirty’s Annual International Banking Seminar in Washington, noting that inflation has been the “biggest” surprise in the U.S. economy this year.

More headlines (via Reuters):

• Fed will pay close attention to inflation data in months ahead
• She does not expect soft inflation readings to persist and that it will move higher next year
• Repeats she expects gradual interest rate increases to sustain employment, inflation goals
• Repeats there is uncertainty on the path of inflation
• Says expects growth to exceed long-term trend in the second half of the year
• Average hourly earnings for September were encouraging
• She expects labor market to continue to strengthen
• Says several aspects of September jobs report were strong