News analysis and views -- economist.com
After a rate-cut, fears of inflation IT SEEMS odd to be talking about it just after the Federal Reserve has cut interest rates in response to fears of an American recession, but many people (including Alan Greenspan, a former chairman of the Fed) are worried about a rise in inflation. It is important to distinguish between the short-term and the long-term. In the short-term, of course, weaker demand as a result of American housing problems and the credit crunch might result in reduced inflationary pressures. Measures of core inflation in America and Britain are now back below their targets.