Despite uptick in inflation, Fed likely to remain in wait-and-see mode at this week's meeting

WASHINGTON (AP) -- A surprising jump in consumer inflation has given the Federal Reserve something more to discuss at this week's policy meeting.

The Labor Department says the consumer price index rose 0.4 percent in May. It's risen 2.1 percent over the past 12 months, roughly the level of the Fed's target rate for inflation.

Economists expect the Fed's first interest rate increase is at least a year away, but that could change if inflation were to accelerate.

Still, some say the Fed might actually welcome the news of slightly higher inflation. For the past two years, inflation has remained under the Fed's target, and an uptick would help ease concerns that inflation might be too low.

Once again, investors will be looking for fresh clues about when short-term rates will finally rise when the Fed issues its statement Wednesday afternoon and Chair Janet Yellen speaks with reporters.

%@AP Links

251-a-09-(David Jones, president, chief economist, DMJ Advisors, in AP interview)-"start moving upward"-Economist David Jones says the Federal Reserve considers raising rates when it fears the economy could grow too quickly and bring inflation. (17 Jun 2014)

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