Fear itself: inflation risks being self-reinforcing prophecy

By STAN CHOE
AP Business Writer

NEW YORK (AP) — Prices are rising at the fastest rate in generations, and have already proven many economists wrong by continuing to rise far longer than they expected last year. If households across the country start to see high, persistent inflation as the new normal, they could ramp up their purchases in hopes of buying ahead of further price increases. That would make the expectation of higher prices itself another trigger for high inflation. Surveys say that’s not the case yet, but worrying signs are growing as gasoline costs hit records on the back of surging oil prices.