Big Call #1: Inflation

In 1982, Paul Volcker raised the Fed Funds Rate to about 16%, to finally end the inflation of the late 1970's that peaked at around 13.5%. Though the economy was sent into a controversial recession, there is no doubt that this policy decision was for the greater good. Since then, Fed governors have been inflation hawks, and rightfully so. Raising interest rates to stave off inflation has kept the economy from growing too fast, which in turn has helped to sustain measured growth.
Since inflation can be controlled so easily, many people assume that it won't happen again.

Ben Bernanke, the new Fed governor, is a leading scholar on monetary policy and inflation. He knows that there is always a tradeoff between the impact of higher interest rates and the impact of inflation. He knows about liquidity traps, and that deflation harder to control, and potentially more devastating, than inflation.

Big call #1 is that we are entering a period of inflation unlike anything we've seen since the 70's, and that the Fed will allow inlationary pressures to take hold before they are ultimately quenched.