Too many smart people are being too dismissive of inflation

Yes, the monthly price index that tracks consumer prices continues to look benign. But even when casting aside the stimulus that the Biden administration wants to add to the economy, some important early warning signals have begun flashing.

The prices of many commodities are surging — copper and lumber because of a jump in home building. Global steel demand has pushed up iron ore prices. Even tin, heavily used in electronics, has soared as suppliers rush to meet consumer demand for new gadgets.

Inflation expectations are also on the rise among traders. Interest rates on long-term Treasury bonds — a reliable inflation indicator — remain historically low, but have been marching upward. That, in turn, has shaken financial markets, which rightfully view climbing interest rates as the enemy of their investments.