Suddenly, then, a debate has revived that had lain dormant during more than two years of very modest inflation.

Keegan knows as well as anybody that even modest inflation over a decade decimates your savings.

Consumer prices rose two-tenths of a percent in May, showing continued modest inflation, and trade figures showed improvement.

But if modest inflation is the ideal, there is little agreement about just what level it should be.

Prices at the producer level jumped 0.9 percent in May after two months of reassuringly modest inflation.

But even modest inflation erodes the deduction's value; this discourages investment.

But we have modest inflation (except in New York City, where a martini at a good bar is now $22).

Markets Treasury prices rose, bolstered by a report showing modest inflation on the producer level.

Even with today's modest inflation, it will kick in for many middle-income taxpayers in the next decade, affecting more than 36 million of them by 2010.

"In the next two to three years, the economy will continued to have a moderate expansion with modest inflation," she said.