Many fear inflation may return after a long lull

Investors have finally detected the whiff of inflation.

Whether it lingers is the debate now underway as stocks and bonds slide worldwide amid concern that prices are set to accelerate after their post-crisis lull. Though inflation still looks under control in most major economies, pressure is building, and there are legitimate reasons to say its return is much nearer than in some time.

That could force the Federal Reserve and fellow central banks to tighten monetary policy more aggressively than anticipated, meaning a sharper end to the era of easy money that’s swaddled markets for years.

“There is clearly a worry about inflation and there is a follow-over to worrying about interest rates and bond yields,” James Bevan, chief investment officer at CCLA Investment Management, told Bloomberg Television.

The International Monetary Fund predicts a global economic expansion of 3.9 percent this year and next, which would be the fastest since 2011. It’s synchronized, too, with growth picking up last year in 120 of the countries it monitors, which together account for three-quarters of world output.

Such an environment means firms should be more confident about passing cost burdens to customers. At JPMorgan Chase & Co., economists led by Bruce Kasman say a “shift away from global goods price deflation is gathering steam.”

More demand leaves many industries running into supply limits, handing them another reason to raise prices.

Workers may enjoy greater bargaining power as labor markets tighten, though that’s a development that’s been forecast and failed to materialize many times already.

A source of the stock selloff was Friday’s news that U.S. average earnings rose 2.9 percent in January, the strongest gain since 2009 and reflective of a 4.1 percent unemployment rate.