Bye, Inflation Bogeyman -- It's Safe to Play Again

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Can we stop worrying already? Everyone’s favorite harbinger of inflation, the red-breasted Consumer Price Index, is harbingering no such thing. After an April spike that put a fear of Greenspan into the markets -- a fear that hasn’t dissipated -- consumer prices in May remained flat (with only a 0.1 percent hike if you exclude falling energy prices). That’s zilch, folks. And so now it can be told: Reports of the resurrection of inflation were greatly exaggerated. "April’s rise was, as predicted, a one-time thing," says TIME senior economics reporter Bernard Baumohl. "With May’s number, the jittery markets may finally be able to stop worrying." (And they did -- rising by almost 190 points by the end of trading Wednesday.)

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Presumably, Greenspan will stop worrying too -– if he ever started. Many saw the Fed’s "bias shift" in May as a virtual rate hike, one that showed up in the market’s interest rates and took some steam out of stocks without the central bank’s actually having to do anything. Now, there are only two reasons for the Fed to raise rates at its June 29 meeting –- to loosen up labor markets or simply to bare its teeth –- and neither seems compelling enough for Alan & the Gang to act before the next meeting, in August. The corral is open again. Do the bulls remember how to run?