Best Columns: Fed up, Fleeting windfall

The Fed and the inflation genie

The Federal Reserve won’t take any action at its meeting this week, says Irwin Kellner in MarketWatch. That much is “baked in the cake.” The “big news” on Wednesday will be what the Fed says. In the edited notes from the Fed’s last meeting, there was a “shot across the bow” to prepare the markets for the day when inflation will “become the Fed’s top priority.” Well, “that day has come.” In fact, with inflation and “inflation psychology” heating up, “it would be worrisome if the Fed did not focus squarely on the risks of inflation.” The last time the Fed took its eye off inflation was the 1970s, and it took years of “sky-high” interest rates “to get the inflation genie back into the bottle” then.

The law of revolving household windfalls

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According to polls, most Americans had good intentions to save their rebate check or use it to pay of debt, says Karen Blumenthal in The Wall Street Journal. But “life happens.” We’ll call it the “Law of Household Economics,” or: “For every financial windfall that comes into your home, there will be an equal, unexpected household cost.” In practice, it means that if you sell hundreds of dollars in stuff at a garage sale, “some unbudgeted expense explodes” and sucks up that cash. This isn’t about “rotten luck.” It’s just another reminder that the occasional windfall will never make up for the “real discipline and hard work” of sticking to a budget, living within your means, and steadily saving for the future.