Given that Fed policymakers are of the view that a decline in the annual growth of prices is bad for the economy they are most likely to embark on very easy monetary policy in near future.
What matters is not price rises as such, but the increase in the money supply that sets in motion the exchange of nothing for something or "the counterfeit effect." Business cycles and recessions follow.
An overheating economy emerges once expenditure rises without being backed up by production, a situation that emerges when the money stock is increasing.
