Holding inflation's horses

THE Federal Reserve's decision to send out a modest reminder of its existence [this month] was reasonable and well-timed. By raising short-term interest rates for the first time in five years by one-quarter of a percentage point, the Fed signaled its vigilance over an economy that has steadily been gathering steam, and heading, just possibly, for inflation....

[Then] the stock market was up and running again, indicating that few investors see the slight increase in rates as a significant damper on the economy. Some home buyers may feel pinched, but in general, mortgage rates should remain attractive.

The real test will come later - if and when the Fed feels obliged to further rein in the economy. But for now, it has wisely moved to calm Americans' fear that low inflation cannot last - and to keep a welcome economic recovery on track.