over the first five months of 2011, and 2 - 1 / 2 percent on a 12 - month basis. much of the acceleration was the result of higher prices for oil and other commodities and for imported goods. in addition, prices of motor vehicles increased sharply when supplies of new models were curtailed by parts bis central bankers ’ speeches shortages associated with the earthquake in japan. most of the recent rise in inflation appears likely to be transitory, and fomc participants expected inflation to subside in coming quarters to rates at or below the level of 2 percent or a bit less that participants view as consistent with our dual mandate of maximum employment and price stability. the central tendency of participants ’ forecasts for the rate of increase in the pce price index was 2. 3 to 2. 5 percent for 2011 as a whole, which implies a significant slowing of inflation in the second half of the year. in 2012 and 2013, the central tendency of the inflation forecasts was 1. 5 to 2. 0 percent. reasons to expect inflation to moderate include the apparent stabilization in the prices of oil and other commodities, which is already showing through to retail gasoline and food prices ; the still - substantial slack in u. s. labor and product markets, which has made it difficult for workers to obtain wage gains and for firms to pass through their higher costs ; and the stability of longer - term inflation expectations, as measured by surveys of households, the forecasts of professional private - sector economists, and financial market indicators. monetary policy fomc members ’ judgments that the pace of the economic recovery over coming quarters will likely remain moderate, that the unemployment rate will consequently decline only gradually, and that inflation will subside are the basis for the committee ’ s decision to maintain a highly accommodative monetary policy. as you know, that policy currently consists of two parts. first, the target range for the federal funds rate remains at 0 to 1 / 4 percent and, as indicated in the statement released after the june meeting, the committee expects that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. the second component of monetary policy has been to increase the federal reserve ’ s holdings of longer - term securities, an approach undertaken because the target for the federal funds rate could not be lowered meaningfully further. the federal reserve ’ s acquisition of longer - term treasury securities boosted the prices of such securities and caused longer - term treasury yields to be lower than they would

ben s bernanke : introduction of the new $ 100 note brief remarks by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the new $ 100 note unveiling event, us treasury department, washington dc, 21 april 2010. * * * thank you, madame treasurer. a sound currency is the bedrock of a sound economy. therefore, the united states government must stay ahead of counterfeiters and protect the integrity of our currency. the three agencies represented here today all share this important responsibility, and today we come together to unveil the latest phase in our efforts – the new design for the $ 100 note. since the u. s. notes first issued by the treasury department in 1862, our national currency has played an integral role in the fortunes of our country. the federal reserve only assumed responsibility for issuing u. s. currency following the passage of the federal reserve act in 1913. as our nation ’ s central bank, we have a wide range of responsibilities related to paper money, from ensuring an adequate supply to protecting and maintaining confidence in our currency. together with our partners at the treasury department, its bureau of engraving and printing, and the united states secret service, we continuously monitor the counterfeiting threats for each denomination, and make redesign decisions based on these threats. this job has become more complex in recent years as technology advances and u. s. dollar flows expand and increase. in just the past 25 years, the value of federal reserve notes in circulation has grown from $ 180 billion to $ 890 billion, an increase of almost 400 percent. and while in the past, most u. s. dollars were held domestically, today many of these notes circulate outside of our borders. in fact, we estimate that as many as two - thirds of all $ 100 notes circulate outside the united states. for this reason, we must ensure that the people around the world who rely on the $ 100 note are educated about changes that we make to its design. we will unveil the new design for the $ 100 note in just a few moments and the federal reserve will begin putting these notes into circulation on february 10, 2011. in the intervening months the federal reserve, together with our partners represented here today, will reach out to businesses and consumers all over the world to raise awareness about the new design and explain how to use its security features. this global public education program is crucial to the successful introduction of