This week’s newsletter has choppy seas, dark skies and the Mediterranean, but it’s not about “The Odyssey." Well, mostly.

We’ve also got the numbers you need to know, some workplace advice and some interesting data on just how far your money goes now compared to past generations.

If you like something you read, please consider forwarding this newsletter to a friend! If this was forwarded to you, sign up here. You can now also email me personally to let me know what you want to see in future issues. Have a great weekend! — Tony Wagner, newsletter editor

On a summer Saturday, off the coast of San Diego, California, about a half-dozen recreational boats dropped their anchors in a popular swimming area.

Each vessel rotated slightly, drifting a few feet here and there, but remaining generally in stable positions.

“A lot goes into it with wind, current, swell,” said Burt Wilkinson, owner of one of the boats on the water that day. “If you look at every boat out here, they’re all battling the wind.”

Central bankers attempting to keep prices stable face a similar conundrum.

In a recent speech at the New York Association for Business Economics, Federal Reserve Board Governor Christopher Waller spoke about the importance of “anchoring” inflation expectations.

“When macroeconomists use the word ‘anchor,’ and when the Fed uses the word ‘anchor,’ what we're talking about is that people's beliefs about inflation might move around a little bit, but they're never going to go that far away from the Fed's 2% inflation target,” said Julie Smith, a professor of economics at Lafayette College. "It's really this belief that inflation is going to return to where it is supposed to be.”

The latest reading of the personal consumer expenditures price index, excluding food and energy (the inflation measure the Fed watches) was 3.4%. It hasn’t been below 2% in more than five years.

“The actual rate of inflation is important, but even more important is what we expect the inflation rate to be in the future,” said Cara McDaniel, a clinical professor of economics at Arizona State University. “Because our expectations of future prices influence the decisions that we make today.”

If a person believes that prices are going up, they might be more likely to make purchases or ask for a raise now, rather than waiting. That can increase demand and push prices up even faster, forcing central bankers to take aggressive actions on interest rates.

But if people expect inflation to eventually go back down to 2%, that cycle might not be as dramatic.

“That makes the Fed[‘s] job easier,” said John M. Veitch, dean of the School of Business and Management at Notre Dame de Namur University.

That is why central bankers care so much about “anchoring” inflation expectations.

“It doesn't mean that inflation or expected inflation can't move a little bit, " Smith said. “But what it does mean is that inflation is going to return to where it is supposed to be.”

To torture this nautical analogy a little more, the heavy thing at the end of the rope that’s doing the anchoring is the Fed’s credibility. The belief in the Fed’s commitment to eventually getting inflation back down to 2% helps stabilize prices.

“We are anchored by trust,” McDaniel said.

The cost of modern life is expensive: Americans are doling out money for everything from streaming subscriptions to health insurance to exorbitant college tuition.

Joe Favorito, a managing partner at Landmark Wealth Management, conducted an analysis looking at how essential expenses have changed over time. In 1950, essential expenses amounted to 25% of our income. In 1980, that figure increased to 32% and today, it now stands at 38%.

He pointed out that our discretionary income has “dropped by 13%” since 1950, but the financial pressure Americans face feels “heavier,” than that amount. That’s because a massive share of our income is now tied to “non-negotiable contracts,” like cell phones, high-speed internet and health insurance. Average new homes are also larger than the average new home back in 1950, leading to “lifestyle inflation,” and the cost of services like health care and education have skyrocketed.

Americans also aren’t making as much money as they should be, which is the real issue behind the financial pressures they face, explained Heidi Shierholz, an economist at the Economic Policy Institute.

She said life is unaffordable for working people and the reason is actually because of the “long-term suppression of workers’ wages,” not the recent price spikes we’ve seen.

“If pay for working people had kept up with productivity over the past 45 years, the paychecks for typical workers would literally be more than 40% higher — that would certainly solve a lot of affordability problems,” Shierholz said.

Turk Montepare stood outside his red-and-cream corner building on Ski Hill Road and Main Street in Breckenridge, Colorado.

It has several shops, including an outdoor gear store, a massage company, and a hair salon. It’s in a ski town with tall mountain peaks, but the historic trim of Montepare’s building and others on the two-lane roadway makes it seem a little more quaint.

“All of these are coming out,” Montepare said, looking at the light fixtures above the covered walkway. “If you notice those bulbs, they do shine down, but they don't want that level of diffusion upward.”

More than 30 of the building’s lights are non-compliant with the town’s Dark Sky and lighting regulations. Lights should point down and the bulb must be covered, with something like a dark shade, for example.

He is planning to install canister lights to go above the covered walkway. But Montepare also has lights directed at business signs on the outside of the building. Those are much harder to fix, so he plans to take them out.

“I'd have to put the pipe up and reconstruct that — it would cost like $2,000 per sign,” he said. “That’s expensive stuff.”

The town’s lighting regulations went into effect last summer, with a grace period through the beginning of this year. Breckenridge leaders have pushed for clear, starry dark skies for years. Research shows that dimming the lights can protect the nightscape for tourists and wildlife.

But finding the right lights and paying for them isn’t that simple. Hundreds of homes and businesses are still out of compliance.

Parts of Europe have been consistently hitting triple-digit (fahrenheit) temps all summer long. It’s easy to make jokes about air conditioning, but the heat has serious economic costs. 

Heat strains infrastructure, making it harder for people to get to work, and they’re often less productive when they get there. Extreme heat is also deadly, and economists peg the cost of preventing excess deaths in the billions. 

Not everyone feels the impact equally. Older, vulnerable adults are of course at risk when the temperature rises. In the labor force, construction and agriculture workers face the most immediate health impacts, London School of Economics researcher Elizabeth Robinson told “Marketplace Morning Report.” Gig workers, too.

“We are seeing that there's long-term impacts on economic growth,” Robinson said. “So it's not just that it's a blip.”