The Inflation-Worriers Gain a Convert

Those rising inflation numbers have spooked Larry Kudlow, who now wants the Fed to take a break:

While I've been a bit dovish on inflation, data over the last 3 or 4 months are changing my mind. Inflation first peaked in July 2005, and then gradually declined through the end of 2006. But since the summer of 2007—and especially in recent months—there has been an alarming rise of inflation.... Here's another problem. The Fed is going to be easing interest rates in the teeth of $950 gold and $101 oil! This can't make any sense to the average Main Street Joe out there. At the end of the day, the job of the Fed is to stabilize the level of prices, or at least to keep the increase in the price level to less than 2 percent. But the yearly changes are way, way above 2 percent.... The Fed should stop easing right now, and it should maintain that posture until commodity prices start falling.

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