by John Rubino
The mainstream press is comfortable with moderate inflation because it raises financial asset prices and allows the government to spend more money. But when inflation hits a rate that threatens the stock market, even the Wall Street Journal starts to fret:
It has taken four decades, but the Federal Reserve has finally shaken off its fear of inflation. The markets are only just waking up to the implications of the shift.
The outlines of the turnaround have been developing for a while as the Fed’s focus has moved from its inflation mandate to a constant emphasis on its goal of full employment. Meanwhile, its measure of rising prices has moved to an average target, allowing inflation to overshoot a 2% goal to make up for past misses.