00:00At the start of this year, I am cautiously optimistic about the economic outlook.
00:05I see signs suggesting that the labor market is stabilizing, that inflation can return to a path
00:12towards our 2% objective, and that sustainable economic growth will continue. To be sure,
00:20there are risks to both sides of the dual mandate given to us by Congress, maximum employment,
00:26and stable prices. Incoming data bear careful watching. Progress on disinflation has stalled
00:36over the past year, and inflation remains elevated relative to our 2% target. Based on the most
00:44recent available data, it is estimated that the personal consumption price index rose 2.9% for
00:52the 12 months ending in December, and core prices, which exclude the volatile food and energy categories,
01:01rose 3%. Those readings are similar to the levels recorded at the end of 2024. The stall in the
01:12disinflationary process is mainly because of tariffs with some goods. Over the past year, we have seen
01:21a decline in services price inflation, mostly due to easing price pressures in housing services.
01:29But this decline has been offset by an increase in core goods price inflation. Certainly, some upside
01:38risks remain, but I expect the disinflationary process to resume this year once increased tariffs
01:46as well. In addition, projected strong productivity growth may be a source of further help in bringing
01:58inflation down to our 2% target.
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