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Nir Kaissar

Inflation Is Just a Monster Under the Bed for Investors

Despite all the fuss about expectations for higher prices, there’s little indication that a worrisome jump is coming.

Don’t fear inflation.

Don’t fear inflation.

Photographer: Jason Connolly/AFP/Getty Images

Economic recoveries are supposed to be a time of celebration for investors, and the recovery from Covid-19 now underway should be no different. The economy is growing again; business activity is picking up; deflation is a distant threat; cheap money is goosing the recovery; and stocks are surging on hopes of higher profits.

And yet, rather than cheer their good fortune, many investors appear to be tormented by the recovery’s potential pitfalls. One of the most feared scenarios is that inflation will spike, pushing interest rates higher and tanking the stock market. While it can’t be ruled out of hand, there’s little indication that a worrisome jump in inflation is coming.