Many investors are celebrating because inflation has slowed down from the torrid peak of 9% in 2022 to just 3.5% as of April 10, 2024.
We are celebrating the deceleration of inflation. However, we still need to realize that inflation isn’t down at all. The current 3.5% (March 2024) is on top of the 4.9% (March 2023), which was compounding on top of 8.5% (March 2022). So, over the last three years, inflation is up 17.8%! That doesn’t sound so rosy.
Everyone is still feeling the pain when they go to the grocery store or restaurants. Even homeowners insurance and car insurance have increased in cost. For the last few months, inflation has stayed around the same level. The Fed has reiterated their goal to get inflation down to 2%. If inflation starts increasing instead of decreasing, the Fed may need to raise rates, which would be bad for all of us.
This creates a lot of crosswinds in the investment world. Historically, investing has been a good inflation hedge. We will continue to manage your investments to help keep up with the insistent pace of inflation while still providing protection against the uncertainties in investing.
