Should we worry about inflation now?
Share Now on:
TEXT OF STORY
Bill Radke: How scared should we be of the inflation monster, and when do we start fighting it? We get another clue this morning when the government releases its latest Producer Price Index, followed by tomorrow’s Consumer Price Index. Joel Rose has the story of a policy walk on a tricky tightrope.
Joel Rose: Economists agree we’re still in a recession. But with the federal government borrowing and spending billions of dollars, some say it’s not too early to worry about inflation.
Jeremy Siegel: I am concerned about the rise in oil prices, the rise in commodity prices in general.
Jeremy Siegel teaches finance at the University of Pennsylvania’s Wharton School:
Siegel: I think actually in the second half of this year that the Fed may have to start raising interest rates to move against inflation.
But there, Siegel seems to be in the minority.
Nick Perna is chief economist at Perna Associates. He says bankers at the Federal Reserve should wait to raise rates until the economy begins adding jobs — probably some time next year.
Nick Perna: The recession is very much with us. All we’ve got going on right now are indications that it might end by the end this year. So against that backdrop, it seems to me to be quite unlikely that we’d have any significant increase in inflation.
Perna says if policymakers move too aggressively to stop inflation, they could also put the brakes on the recovery.
I’m Joel Rose for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.