Behind the Wheel 🚗

Behind the Wheel

Back in mid-June, the Federal Reserve increased its inflation forecasts for 2021 and said it could raise interest rates as soon as 2023. Inflation is expected to rise to 3.4% this year, more than the Fed’s prior inflation forecast of 2.4% in March. Furthermore, previous Fed projections indicated that the first interest rate rise would not occur until 2024 — is the economy overheating faster than expected? Well, before this can really be understood it is key to understand what is the causing the inflation. There are multiple factors at play, but one of the largest reasons is used cars. So how do cars create inflation? Well, used cars have been in high demand this year, in part because of a shortage of new cars which occurred due to the pandemic and the severe global shortage of semiconductors – pushing prices up.

More specifically, the shortage slowed supply chains and forced manufacturers to limit production even though there are so many willing to buy. However, it is possible that the trend is reversing now, and prices will reduce back down to reasonable levels – given due time. This is because in recent weeks the buying frenzy has slowed. In turn, inventory at used car lots has risen back to normal levels, and demand at wholesale auto auctions is less intense than it was back in spring of this year. What do you think about the auto-shortage, and will we really see prices return to normal anytime soon?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:

More Posts

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community.The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results.Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such.Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.