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Models used to describe and predict inflation commonly distinguish between changes in food and energy prices - which enter into total inflation - and movements in the prices of other goods and services - that is, core inflation.

Because food and energy prices are volatile, it is often helpful to look at inflation excluding those two categories - known as core inflation - which is typically a better indicator of future overall inflation than recent readings of headline inflation.

Domestic inflation reflects domestic monetary policy.

The Federal Reserve's monetary policy objective is to foster maximum employment and price stability. In this regard, a key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal.

The central focus of what we are doing at the Fed is to keep inflation from accelerating - and preferably decelerating.

The government will always tell you that it wants low inflation. The real issue is the horizon over which to bring inflation down.

A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.

The Federal Reserve's objectives of maximum employment and price stability do not, by themselves, ensure a strong pace of economic growth or an improvement in living standards. The most important factor determining living standards is productivity growth, defined as increases in how much can be produced in an hour of work.

But clearly an economy that's growing and expanding like this one - and it certainly is doing that with high GDP output, employment numbers strong, capacity utilization strong - that's an environment in which the Fed needs to continually be alert to early signs of inflation.

In reality there is no such thing as an inflation of prices, relatively to gold. There is such a thing as a depreciated paper currency.