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The latest inflation report carried mixed messages: a moderate rate of inflation for now, but ominous signs of pressure from oil prices.

The Bureau of Labor Statistics reported that inflation for the month of January was 0.2 percent. There are good and bad sides to this: 0.2 percent is a fairly moderate pace of monthly inflation, but it was the highest inflation rate in four months. The question is, after virtually no rise in the Consumer Price Index (CPI) in the fourth quarter of 2011, is inflation poised to return?

Rising inflation would be a problem for the economy in general, but in particular it would threaten people who are dependent on interest income from savings and money market accounts. Inflation can hurt them immediately in one way, and over the longer term in another.

Inflation trends

The mild inflation of recent months has brought year-over-year inflation back below 3 percent for the first time since early last year. However, with Federal Reserve policy focused on stimulating growth, inflation is a threat to bubble up at any time.

What could push inflation higher is the rising price of petroleum products. The price of a barrel of oil recently rose back above the $100 mark. Overall, fuel oil rose 12.1 percent over the past year, and gasoline jumped 9.7 percent.

Oil prices also made a run at about this time last year and may have been responsible for slowing down the economy in the months that followed. Will history repeat itself?

The 'now and later' effect on savings account rates

While inflation costs all consumers, it is especially hard on those who depend on money market and savings accounts for income. The immediate effect is a loss of purchasing power. Inflation for January may be considered moderate at 0.2 percent, but that single month's worth of inflation is enough to wipe out a year's worth of interest at today's average savings and money market rates. Similarly, even with inflation slipping below 3 percent for the past year, that is still enough to cause a loss of 2 percent or more in purchasing power for savings and money market accounts.

That's the "now" effect. The "later" effect comes from the role inflation could play in keeping savings and money market rates down in the future. Under normal circumstances, interest rates would adjust to the level of inflation, but given the persistently soft economic conditions of the past few years, interest rates have remained low in spite of inflation. If rising prices slow the economy just as it seemed to be improving, it would probably mean an even longer wait before interest rates could rise.

Employment has been the key economic indicator to watch in recent months, and that has been steadily making progress. However, the wild card to keep an eye on now is oil. More price pressure from that sector could be a drag on employment, and on economic growth in general.

A recent survey conducted by CareerBuilder finds many workers older than age 60 do not expect to be able to retire any time soon. In addition, a significant number of survey respondents indicate that once they retire from their current job, they will likely look for new employment.

One in 10 don't foresee retirement

The CareerBuilder survey asked 800 workers older than age 60 when they expect to retire from their current position. More than 10 percent responded by saying they don't think they will ever be able to retire. The remaining respondents said they expected to leave their current job in the following time frames:

• 1-2 years: 26 percent
• 3-4 years: 23 percent
• 5-6 years: 22 percent
• 7-8 years: 7 percent
• 9-10 years: 7 percent
• 10+ years: 4 percent

Regardless of their anticipated retirement age, 57 percent of those surveyed said they expect to look for a new job after retiring from their current position.

"Whether mature workers are motivated by financial concerns or simply enjoy going to work every day, we're seeing more people move away from the traditional definition of retirement and seek 'rehirement,'" said Rosemary Haefner, vice president of Human Resources at CareerBuilder, in a press statement.

Tips for retiring on time

While some seniors may enjoy working, others may find they simply do not have the monetary resources needed to retire on a traditional schedule. Having a strong retirement portfolio and a good financial plan are key to avoid being pressured into work after retirement age.

The best way to prepare for retirement is a combination of reducing expenses and increasing savings:

• Pay off credit cards and other consumer debt: Living off retirement income is much easier for those who aren't still paying for purchases from years past. If possible, consolidate balances on a 0 percent interest credit card or low interest account and make extra payments toward that balance whenever possible.
• Diversify investments: Instead of investing in single stocks, a better strategy may be to spread money across a number of mutual funds that offer varying investments and risk levels. A good financial advisor can help identify which funds are most appropriate.
• Take advantage of employer and tax perks: Many employers will match some or all of employee 401(k) contributions. By taking advantage of this perk, retirement funds can effectively be doubled in some cases. For those who have maxed out their employer match, contributing to a traditional IRA offers tax benefits that can far exceed the interest offered by money market accounts and other savings options.

After riots raged in the streets outside, the Greek Parliament today approved a highly unpopular set of austerity measures in an effort to deal with the country's severe debt crisis. The move indicates that Greek leaders are finally acknowledging the harsh reality of the situation, but among the citizens of Greece, that reality is proving harder to accept.

For the politicians and citizens of the U.S., the Greek turmoil should serve as a cautionary tale about national debt. The dire problems in Greece's situation raise questions about the optimistic scenario that the U.S. economy will inevitably get back on track, pushing the stock market, savings account interest rates and real estate prices higher in the process.

The Greek dilemma

The dilemma faced by the Greek parliament is a matter of picking their economic poison. The government's out-of-control debt demands dramatic budget cuts, but those budget cuts will further handicap an economy that is already in shambles. As just one illustration of this situation, the new austerity plan calls for 150,000 government layoffs at a time when the unemployment rate is already at 21 percent.

The Greek people lashed out at the new austerity measures with protests by 80,000 and riots that left parts of Athens in flames. As irrational as this reaction may seem, it is important to recognize the element of denial in it that is part of human nature. After all, to the man on the street, defaulting on government debt is a somewhat abstract concept, whereas the lack of jobs is a concrete and immediate problem.

The Greek parliament wasn't wrong to approve the austerity measures -- defaulting on the government's debt would result in extreme budget constraints as well, and with less chance of controlling the process -- but that doesn't mean the country's citizens are going to take the medicine cheerfully.

Lessons for America

All of this is worthy of note here in the U.S. for two reasons:

• Trouble in Europe could still upset the apple cart for the U.S. economy. Right now, things seem to be progressing smoothly -- growth is picking up and unemployment is easing. The stock market has rallied, and continued prosperity should build support for two areas that badly need it: savings account interest rates and housing prices. However, an economic slowdown in Europe or a new financial crisis resulting from sovereign debt problems could drag the U.S. economy back down.
• Fiscal responsibility is not always popular. In an election year, politicians want to create the illusion that they can balance the budget without tax increases or spending cuts. Denying responsibility in this way is the same kind of poor leadership that has led to Greece's predicament.

In the end, economics will impose its will on a situation regardless of popular sentiment. The Greeks are facing this harsh reality now, and it is a lesson that should not be lost on the people and government of the U.S.

In what is the largest federal-state civil settlement ever reached, five mortgage companies -- Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formally GMAC) -- have agreed to spend $25 billion to address concerns regarding their foreclosure procedures.

Yesterday's announcement comes after some of the nation's largest lenders were accused of violating state and federal law. As a result, those who lost their homes to foreclosure may receive cash payments while those who are currently "underwater" may have the opportunity to refinance at today's historically low mortgage rates.

Deceptive practices in question

After the housing market collapse, many homeowners found they had negative equity in their homes, also known as being underwater. With the subsequent recession, many borrowers found they were unable to make mortgage payments. However, they were also unable to sell their homes. As a result, foreclosures skyrocketed near the end of the last decade.

While consumer protections were put in place to help homeowners avoid foreclosure, the government determined some mortgage lenders acted deceptively and failed to follow proper procedures. In announcing the settlement, the Department of Justice cited the following violations:

• 'Robo-signed' affidavits for foreclosure proceedings
• Deceptive practices in offering loan modifications
• Failure to offer non-foreclosure alternatives to borrowers with federally-insured mortgages
• Improper documentation filed in federal bankruptcy court

Mortgage settlement terms

"This historic settlement will provide immediate relief to homeowners -- forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers," said HUD Secretary Shaun Donovan in a press statement. "Banks must follow the laws. Any bank that hasn't done so should be held accountable and should take prompt action to correct its mistakes."

The mortgage settlement creates a $1.5 billion fund to repay those who lost their homes to foreclosure from January 1, 2008 to December 31, 2011. The payment amount will vary depending on the number of individuals making claims from the fund, but it is estimated those eligible will receive checks for up to $2,000. Individuals should contact their bank to determine eligibility.

In addition, the participating lenders have agreed to devote $17 billion to providing mortgage relief to underwater homeowners and those behind on their payments. It is expected that those eligible for this program could see their principal reduced by an average of $20,000 per borrower. Those not eligible for a principal reduction may be able to tap into the $3 billion earmarked toward allowing homeowners to refinance at today's lower interest rates.

The settlement will be executed over a three-year period. Oklahoma chose to pursue its own settlement with lenders, and residents there are not eligible for the provisions of the national settlement.

Following its first 2012 meeting, the Federal Reserve released a new type of report that contained details on the economic assumptions and forecasts of the Federal Open Market Committee (FOMC) members. The report was aimed at giving more transparency to an organization that hasn't always been known for sharing its reasoning with the public. With the Fed's decisions affecting everything from credit card rates to money market rates, that's a good thing, right?

But while transparency in government is usually a good thing, there are some reasons why the Fed might think twice about its new policy.

New reporting highlights

Here are some new features of the Fed report from January:

• Forecasts of variables such as GDP growth, unemployment and inflation.
• Three years worth of estimates of those factors, along with long-term forecasts.
• Information showing the range of forecasts submitted by FOMC members.
• Projections of what the fed funds rate is likely to be over the next three years, along with what the rate is expected to be for the long-term norm.
• Information on the statistical distribution of the rate forecasts submitted by FOMC members.
• A breakdown of FOMC committee members' estimates of when it will be appropriate to tighten the money supply.

In all, the report represented something of a dream for statistics junkies -- as well as a significant change from the Fed's traditional reporting style.

A departure from the past

Written reports from the Federal Reserve are available going back to 1936, when Marriner Eccles was chairman. Fed reports of that era did not contain anything like the statistical detail provided by the new reporting format, but interestingly, they did provide the identities of dissenting voters, so in this sense they were even more explicit than the new format's statistical representation of voting differences.

Eccles was succeeded by Thomas McCabe in 1948. The format of reports during his chairmanship was a little less structured than previously, and more like a running narrative of policy actions taken and the economic conditions behind them.

McCabe was followed in 1951 by William Martin, Jr., who became the longest-serving Fed chairman in history. Under Martin, the sheer volume of reporting increased considerably. Meeting reports expanded by several pages, and the Fed began to also produce detailed assessments of economic and monetary conditions. Unlike the new FOMC format though, the emphasis was squarely on depicting current conditions rather than predicting the future.

Following Martin, there was a succession of three Fed chairmen during the 1970s, but despite all the turnover, reporting practices didn't change much. It wasn't until Alan Greenspan took over in 1987 that the reporting approach changed significantly. Greenspan introduced the practice of issuing succinct, conclusion-oriented statements on Fed policy decisions. Economic details were still available in other formats, but these new statements seemed designed to communicate outcomes rather than invite analysis of the reasons behind those outcomes.

In a sense, the new statistical reports represent a return to providing detail rather than simple conclusions, but they differ from the past reports of any era in that they make predictions about the future.

The downside of transparency

The Fed's new transparency is a big change, but is it better than the approaches of the past? Here are some potentially negative consequences to the policy:

1. Forecasts could turn out to be a self-fulfilling prophecy. For example, the Fed is forecasting tepid economic growth this year. Seeing that, businesses may push back expansion plans until 2013 -- and thus ensure that growth will be weak.
2. The Fed may be limiting its flexibility to adapt to changing conditions. Once the Fed has made a multi-year commitment to a policy, will it feel obligated to follow through on that commitment, even if changing economic conditions indicate that a different policy would be appropriate?
3. A wide split in opinions could undermine confidence in the Fed. An interest rate policy that passed by a narrow majority might be seen as being on shaky ground.
4. Inaccurate forecasts could cost the Fed credibility. The Fed is publicly putting its reputation on the line with its detailed economic forecasts. A series of inaccurate forecasts could make people doubt the ability of the FOMC.

Opinions on the new reporting detail will vary, but ultimately the verdict may lay in the hands of whoever eventually succeeds Ben Bernanke as Fed chairman. Whether the next chairman continues or changes the reporting approach should speak volumes on whether the FOMC found its transparency to be worth the effort.