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Prices are still uncomfortably high — here’s what inflation is and what causes it

Grocery checkout belt with groceries being scanned

Inflation is when the dollars in your wallet lose their purchasing power as prices surge. It’s an economic phenomenon that has a nasty reputation among policymakers, investors and consumers alike. For the first time since the 1980s, price pressures have become a real threat to both household income and the broader economy.

“That basically gives the economy the ability to slowly raise prices,” says John Cunnison, CFA, chief investment officer at Baker Boyer Bank. “For companies, they can slowly increase people’s wages. You’re really looking at the goldilocks inflation — not too little, not too much.”

Read on Yahoo! Finance