(3 of 3)
Despite last week's slide in the cost of money, the Federal Reserve will remain under heavy pressure to stimulate the economy by returning to an easy money policy. As concern with growing unemployment (current rate: 7%) begins to replace the country's obsession with inflation, the Fed will need all its vaunted independence to resist political pressure. Says Du Pont Chairman Irving Shapiro: "Volcker's program is successful. The risk now is that politicians will do damn fool things to win an election rather than solve the inflation. If that occurs, the whole recession process will have been a waste." Returning too quickly to a stimulative money policy would only assure that the next round of inflation will be even higher than the current level, a disastrous 18%. One measure of how exploding expenses are affecting Americans: maintaining a moderate standard of living for a typical family of four in New York City now costs a cool $23,000-plus a year.