Inflation's Strenghth Raises Concerns

This article was about concerns of inflation in the economy. Because of rising energy costs, consumer prices climbed steadily in March. This inflation put Federal Reserve officials into a very tough bind. They had to rise interest rates to dampen inflation showing that this could damage the economy. According to Lynn Reaser, the chief economist at Banc of America Capital Management, "The Federal Reserve is having to walk a very fine line now, hoping to keep growth continuing, but acting to keep inflation in check." Prices rose 0.6% in March, which was twice what analysts had predicted. This was also the highest monthly rate of inflation since August of 2002.
The policy making Federal Open Market Committee is to meet on May 3 and is expected to increase rates again. Consumer's confidence has also flagged, and the nation's trade deficit has increased to a new record.
High interest rates and increasing gas prices are prompting consumers to rein in their spending. Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington, said, "We're headed for real trouble because we don't have a pattern in place to support healthy and sustainable growth."
Many believe that rising inflation and slowing growth might bring back "painful memories" of the late 1970's and early 80's when inflation wreaked economic chaos and "eroded" living standards.
I think the Federal Reserve will have to begin to pay more attention to inflation. In the long run, there is nothing more debilitating than inflation.