“Behind cheaper credit, inflation fears loom,” says the The Washington Post.

The Fed’s action could … revive inflation, many economists fear. By reducing the interest rate financial institutions charge each other for short-term loans, the Fed makes money more readily and cheaply available. If it miscalculates, it can pump too much money into the economy, fueling excessive demand for goods, housing and capital spending — and driving up prices.

That would undermine Fed Chairman Ben S. Bernanke’s long-cherished notion of setting a low, narrow and predictable target range for inflation. Through higher consumer prices, all Americans would effectively help pay for the rescue of the financial industry. The decline in housing prices might be tempered, but inflation would eat away at real housing values.

Yesterday, already sky-high corn and copper prices rose further on anticipation that the Fed’s latest rate cut would stimulate demand.

Meanwhile, oil prices jumped more than $3 in New York to $109.42 a barrel and gold remained at around the $1,000 an ounce as investors continued to see the yellow metal as hedge against inflation.

Money Morning’s Keith Fitz-Gerald sees oil and gasoline prices going higher — much higher. Click here to find out the four keys to higher oil.

“Oil prices have made a major move in the past five years,” says William Patalon III, ” just as the emergence of China, Russia and several other key economies transformed crude-oil pricing into much more of a global game. High prices have sent cash pouring into the coffers of oil-producers in Asia and the Middle East. Many countries have used that capital to finance global investment initiatives, creating government-controlled ’sovereign wealth funds’ to do their bidding.