Inflation wears away your purchasing power, meaning the dollars you save today will be worth less in the future.
by Emily Batdorf
Yahoo! Finance
Inflation has been all over the news over the last couple of years. Even if you’re not tired of hearing about it, you’re probably sick of higher prices at the grocery store and gas pump.
As of March 2024, the U.S. inflation rate was 3.5% for the previous 12 months. Although inflation has cooled following the 40-year high of 9.1% in 2022, it’s still above the Federal Reserve’s long-term target of 2%, which it considers ideal for employment and stable prices.
Not only can inflation negatively impact the economy as a whole, but it can also make it tough for the average consumer to save. Let’s take a closer look at how inflation affects savings and what you can do to combat it.
Argentina’s central bank has put the country’s first 10,000 peso notes into circulation, in a long-awaited step to streamline the nation’s cumbersome use of large heaps of cash following the collapse of their currency.
The next Consumer Price Index release for April 2024 is expected to continue the pattern of relatively higher inflation as seen so far this year. If so, it’s likely to provide support for the Federal Reserve holding back on interest rate cuts until July or later.
WASHINGTON, May 7 (Reuters) – The strength of the U.S. housing market and potentially stalled progress on inflation means monetary policy may not be as tight as Federal Reserve officials think it is, Minneapolis Federal Reserve President Neel Kashkari said in a new essay, opens new tabon Tuesday that raises the possibility price pressures are “settling” to a level above the Fed’s 2% target.
Steve Eisman, best known for his “Big Short” bet against subprime mortgages, said that the idea tariffs imposed by Donald Trump will drive up inflation is “ridiculous.”
The weak GDP figure for the first quarter came with a double negative: poor consumer spending and exports, plus a rise in core inflation. The US administration’s enormous fiscal stimulus underscores the importance of considering the weaker-than-expected data.
If you are like most Americans, the cost of living has been going up much faster than your income has been. Right now, millions of Americans that were once prospering are now deeply struggling. When I was growing up, most of the population could afford to live “the American Dream”, but now that is no longer true. At this point, the basics of a middle class lifestyle are out of reach for most Americans. Poverty and homelessness are steadily rising, and the economy has become the number one issue during this election cycle. Most of us just want things to go back to the way that they once were, but thanks to the very foolish decisions of our leaders that simply is not possible.
Fast food has become increasingly expensive — and some consumers are changing their spending habits because of it.
Wait for it. That’s the message from Federal Reserve Bank of Richmond President Thomas Barkin, who said he expects high interest rates to eventually cool US inflation to the central bank’s 2% target. Barkin said Monday the strength of the labor market offers the Fed time to gain confidence that inflation is moving sustainably lower before cutting borrowing costs. But he cautioned that there still is risk that continued housing and services inflation will keep price gains elevated. Sellers are still trying to raise prices, he warned, and they will do so until customers push back strongly. “The risk is that, as we get less help from the goods sector, continued shelter and services inflation will leave the overall index higher than our target,” Barkin said.
Visualizing Global Inflation Forecasts (2024-2026)