Inflation is Back
Consumer prices in the U.S., Europe and other rich countries are projected to rise 2.6% this year, the highest inflation rate since 1995, the International Monetary Fund said.</br></br>After several years of quiescent inflation, a wave of rising prices is washing over the world economy.</br></br>It comes at a most inconvenient time. The Federal Reserve is sharply cutting U.S. interest rates -- the opposite of the usual response to rising inflation -- to prevent the housing bust and credit crisis from causing a deep, prolonged recession. That is making the global response to inflation more complicated.</br></br>Food and energy prices are big drivers of inflation: Core inflation, a measure that excludes volatile food and energy prices, is currently lower than overall, or headline, inflation. But commodity-price gains are beginning to work their way through the global economy.</br></br>Read Andrew Batson's article about rising inflation and the markets affected by the price increases. http://online.wsj.com/article/SB120778643316903397.html