00:00While the effect of oil prices on economic activity may be unclear,
00:04what is clear is that higher prices are contributing to higher inflation.
00:09CPI price increased 3.8% in the 12 months ending in April,
00:14and higher gasoline prices were a big part of this.
00:18But not the only part.
00:20Excluding energy, inflation is also running hot,
00:23with prices increasing 2.8% over the last past year.
00:27There is an active discussion among academics and policy makers
00:31about how monetary policy should respond to relative price changes,
00:36such as the recent surge in oil prices.
00:40Textbooks suggest that central bankers should look through such price changes,
00:44but there is also a realization that inflation can become embedded and persistent.
00:50With inflation running above the Fed's 2% definition of price stability for over five years now,
00:56now is not the time to let our guard down.
00:59We must continue to signal our commitment to price stability
01:02and our willingness to take actions necessary to achieve our mandate.
01:06And we must continue to signal our்
01:06you
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