Wall Street: A Scent in the Air

Washington may fear inflation, but Wall Street loves it—even before it has arrived. Reason: the very threat of inflation often attracts investors afraid that their money will erode elsewhere and tends to give the market that boomy feeling. Though most economists agree that inflation is no serious threat to the economy right now, Wall Streeters believe that they have begun to sniff a hint of it in the air. Every warning about its dangers—such as the current statement by the New York Federal Reserve Bank that the economy "is clearly vulnerable to inflationary pressures"—seems only...