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The U.S. Federal Reserve’s preferred method of measuring inflation is the personal consumption expenditures price index.  This index rose 0.2% in December.  Over the past 12 months inflation has risen 1.6%.  This is important because it remains below the 2% inflation target of the Federal Reserve.  Inflation is expected to increase over the next few years due to rising energy prices and higher wage growth.  However, Janet Yellen, the Chairwoman of the U.S. Federal Reserve, has said “this rise in inflation was anticipated” and that they are keeping a close watch on the growth of inflation.