Mild inflation leaves the Fed with leeway to help stimulate the economy.
Most economists expect the Fed will hold interest rates low at its April 24-25 meeting. But policymakers appear less inclined to take further steps to boost growth. Minutes from their March 13 meeting showed only a couple members expressed support for purchasing more bonds as a way to drive down long-term interest rates and promote more borrowing and spending.
Still, Janet Yellen, vice chair of the Federal Reserve, said the economy remained weak. She signaled in a speech Wednesday that members could change their mind, if conditions worsened.
"I anticipate that the U.S. economy will continue to recover only gradually and that labor market slack will remain substantial for a number of years to come," she said.
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AP Economics Writer Christopher S. Rugaber in Washington contributed to this report.
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