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No Grinch the Fed

Your friendly Commerce Department will release monthly personal income figures the day before Christmas. That lets Americans know if they collectively can afford the presents they bought just after they finish buying. Ah, statistics ...

Over at the Federal Reserve Bank no one is playing the grinch. Alan Greenspan & Co. aren't expected to raise short-term borrowing rates - at least for now. But some "deficit hawk" economists, who habitually call for higher interest rates to ward off future inflation, now forecast that the Fed will raise rates in February.

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That would fly in the face of facts. With Asian Pacific nations selling Americans cheaper products and buying fewer US exports, there's no logical reason to expect a rise in inflationary pressures soon. In addition, those Asian factors should damp wage pressures in the US.

Moreover the '90s seem to prove the US can keep joblessness low and plant capacity high without causing inflation. Unemployment is at a generation-low 4.6 percent. Year-to-date inflation is a minuscule 1.2 percent. And both have stayed low for almost six years now. So why should the Fed penalize success? We can do without a grinch in February as well.

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