Economists Keep An Eagle Eye For Signs Of ‘Moreflation’

Sentiment in financial markets changes quickly. The big worry for most of the last year has been about collapsing growth and falling prices. Now markets are fretting about inflation. Such fears were behind the sharp sell-off in US equities in the early part of last week, reports Reaction.

Investors worry that a strong recovery may create supply shortages and propel commodity prices higher. The ensuing inflation would force central banks to raise interest rates, hitting equity values.

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