Insights + Resources

Inflation on the Rise

Sep 2, 2020

Inflation Balloon Rising
What to keep in mind regarding the recent CPI numbers…

Right now, many Americans are worried about their financial health due to the impact COVID-19 has had on the country. Adding to these concerns were July’s consumer prices— excluding food and energy—which rose at the highest rate in nearly 30 years. However, this jump may not be as scary as it looks on the surface. Let’s dive into inflation on the rise.

We’ll get a better idea about the trend on inflation when the Consumer Price Index for August 2020 is released on Friday, September 11. But here are some factors to keep in mind.1

The 2% rule

According to the Bureau of Labor Statistics, core inflation is 1.6% year-over-year on an unadjusted basis. Some investors may view this as alarming given that this is the largest jump since January 1991. However, considering the Fed’s 2% target, this could be a relatively benign number.2

Inflation or Disinflation?

Chairman Powell made it known, following the most recent meeting of the Fed, that the board was wary of disinflationary pressures over inflationary ones. True, the Fed often takes a long-view approach, but this may still be positive news. Disinflation occurs when price inflation slows down temporarily. The Fed often uses this term when describing periods of slowing inflation.3

Mixed Opinions

Regardless, many professionals are divided over what this jump in price means. For some, it signals the American economy took a step toward recovery. For others, they believe inflation is already here and that July’s numbers are a warning shot across the bow.4

Despite recent headlines, many believe more data is needed before this can be called anything other than a data point. However, if you’re concerned about the trend in inflation, it’s never a bad idea to contact your financial professional to learn more about inflationary pressures or to chat about the upcoming CPI numbers due to be released in September.

Tags: , ,

More Insights

Sep 23, 2020

When it comes to retirement, some women face obstacles that can make saving for retirement a challenge. Women typically earn less than their male counterparts and often take time out of the workforce to care for children or other family members. Added to the fact that women typically live longer than men, retirement money for … Continue reading “Women Facing and Conquering Retirement Challenges”

Sep 21, 2020

Football is back, which means Summer is coming to a close, days will get shorter, and sweaters will soon be in play. This year, there was no pre-season, so professional football started in September, which coincidentally, is a perennial month for stock market volatility.1

Sep 18, 2020

Roth IRA Conversion decisions have attracted retirement savers since their introduction in 1998. They offer the potential for tax-free retirement income, provided Internal Revenue Service rules are followed.

Sep 16, 2020

The 2015 Obergefell v. Hodges Supreme Court decision streamlined tax and estate strategizing for married LGBTQ+ couples. If you are filing a joint tax return for this year or thinking about updating estate strategies, here are some important things to remember.

Sep 14, 2020

How much does extended care cost, and how do you arrange it when it is needed? The average person might have difficulty answering those two questions, for the answers are not widely known. For clarification, here are some facts to dispel some myths.

Insights + Resources >