Inflation Signals
If you’re having trouble wrapping your head around inflation, you aren’t alone. Many economists are perplexed by the trends these days because it seems like, only yesterday, our country was faced with deflation. The most recent CPI went up compared to predictions, at a record level of 8.3% compared with last year’s figure.1 That much inflation can signal future price changes for us down the line, so this is something to keep your eyes on.
One way to keep track of inflation and the potential impact on the economy is by watching the Federal Reserve Board. Recently, several Fed governors have stated that they are very comfortable with how the economy is recovering, indicating that within the next few months, the Fed may change direction when it comes down to monetary policy.2
Six to nine months may not seem like a long time in the grand scheme of things, yet for consumers who are thinking about where to put their money, this can feel like an eternity. Right now, it’s hard to say what will happen with inflation, but keeping an eye on the Fed’s actions may be one way that investors can try and decipher its thinking.
Always remember that when making adjustments to your portfolio, inflation is just one factor to consider. If you feel like things are getting uncomfortable, please reach out and we would be glad to give you advice on the matter – we welcome opportunities to speak with you!
Citations
1. BLS.gov, September 10, 2021
2. FederalReserve.gov, August 18, 2021