Now that the Fed's move to lower interest rates has been more fully digested, inflation concerns have arisen anew. Joining gold and oil in flashing inflation signals have come other commodities, notably corn and now wheat. Core measures of inflation, which exclude much of the effects of the rising costs of these basic ingredients of everyday life, seem likely to remain on a muted path, but actual dollar-sapping price increases do seem headed into the economy. If recent history is any guide, such bouts of price increases may serve to trim economic growth; this in turn may serve to increase concerns that weaker growth from fewer disposable dollars coupled with higher costs could produce a period of stagflation. At the moment, it's way too soon to tell.
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