The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

U.S. Federal Reserve Chair Janet Yellen.
U.S. Federal Reserve Chair Janet Yellen.
(John Gress/Reuters)

Why you shouldn’t be worried about inflation

After the U.S. inflation rate jumped higher than expected last week, the world was suddenly awash with concern that the Federal Reserve was going to have to raise its key interest rate sooner than expected or run the risk of allowing inflation to bubble up to uncomfortable levels.

But here comes the other side of the argument, which boils down to a key observation: Wages are going nowhere, and without increases there it’s hard to see the uptick in the consumer price index as anything more than a blip.