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
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.
As a parent, of course you want to give your child the best opportunity for success, and for many, attending the “right” university or college is that opportunity. Unfortunately, being accepted to the college of one’s choice may not be as easy as it once was. Additionally, the earlier you consider how you expect to … Continue reading “Countdown to College”
New inherited IRA rules took effect on January 1, 2020. The Setting Every Community Up for Retirement Enhancement (SECURE) Act became law on that day, altering the regulations on inherited Individual Retirement Account (I.R.A.) distributions. The big change: the introduction of the 10-year rule for beneficiaries. Most people who inherit a beneficiary IRA now have … Continue reading “The New Inherited Beneficiary IRA Rules”
How do you picture your future? If you are like many contemplating retirement, your view is likely pragmatic compared to that of your parents. That doesn’t mean you must have a “plain vanilla” tomorrow. Even if your retirement savings are not as great as you would prefer, you still have great potential to design the … Continue reading “Retirement Seen Through Your Eyes”
At this time last year, it was still unknown that a deadly global pandemic was on the rise, eventually stalling economic growth and sending crude oil prices into negative territory. But recently, oil prices have surged, with crude hitting highs not seen since before the pandemic.
It can be easy to overlook the nation’s solid economic fundamentals when the financial media splashes stories every day about an army of amateur traders, short-selling mania, and initial public offerings (IPOs) that double in price on the first day of trading. But a recent survey by The Wall Street Journal showed just how upbeat … Continue reading “Economic Predictions: What Lies Ahead?”
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >