Economics
Rising Commodity Prices Boost Outlook for Inflation
- Years of raw-materials deflation ending: Sanford Bernstein
- Bloomberg Commodity Index touches 11-month high on Tuesday
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Rising commodity prices are feeding through to expectations for quickening inflation. There are signs that further gains may be in store for both.
A weaker dollar, U.S. corporate tax cuts and signs of improving global economic growth have helped boost raw materials. The Bloomberg Commodity Index reached an 11-month high on Tuesday, and the underlying pace of U.S. inflation unexpectedly accelerated in December. While inflation has held below the Federal Reserve’s target, advancing commodities are one factor that show why policy makers are expected to continue raising interest rates this year.