In this newsletter we discuss the question of when inflation will stop.

Subject line: When will Inflation stop?

With the buzz in the headlines and the pinch at the checkout line, it’s no surprise that inflation has become something Americans can not ignore. We don’t see inflation as coming to a screeching halt anytime soon. However, based upon the research we’ve seen, it appears that the peak has possibly been reached as the rate of increase is slowing somewhat.

Inflation – key points

There is so much information flowing on this subject; here are the key points to know.

  • This year, CPI has risen 8.5%, representing the largest increase in two decades. A sharp decrease in rents and used car prices has held inflation CPI in check, while food prices are up nearly 9% versus year ago levels. Core goods excluding food and energy have also seen a large year-on-year rise.
  • Geopolitical factors will play a large role. Although retail gasoline and oil prices are down from the spike they hit when the Russian invasion occurred, supply chain disruptions in China are likely to impose upward pressure on prices.
  • As inflation began in April of 2021, year-on-year comparisons may be easier on a going forward basis. However, despite what these comparisons may say, we are likely to feel the material impact of inflation for some time.

What it all means

The key takeaway for investors is that inflationary forces are here to stay for the short to medium term although there do seem to be some headwinds. Your best defense is monitoring your purchase decisions to see if there are ways to keep spending in check until price increases abate.

If you would like to discuss your portfolio or financial plan, or have questions specific to your situation, please contact us.

-Judd

Sources

Regions Financial. (12 April, 2022). Economic Update. Retrieved from https://assets.realclear.com/files/2022/04/1979_cpi.pdf