Deflating Inflation 💰

Deflating Inflation

For the last few months, the main economic worry rocking the stock market has been inflation. Inflation is an increase in the price level of an economy, which ends up devaluing the currency and decreasing purchasing power. This occurred during the COVID-19 economic recovery for many reasons, but we’ll single it to 2. First is the increased amount of money in the financial system, which was necessary to stimulate the economy and boost a recovery. This is a major cause of inflation because it devalues the dollar, which makes companies raise their prices. Second is the supply chain issues. Due to COVID-19, companies lacked the ability to receive imported goods smoothly, and when you mix that with the heavy amount of dollars, you receive high inflation.

On Wednesday, the U.S. Labor Department released the Consumer Price Index report for July, and things weren’t as bad as expected. The CPI rose by 5.4 percent, which matched the previous month but also fell short of expectations. Core inflation, a metric that excludes food and energy due to their volatile swings, rose by 0.3 percent, which ended up falling short of the expected number. In an earnings report, falling short of the expectation isn’t a good thing, but here, it marks a turning point in the battle with inflation. This is the first time in a while that inflation has slowed down, posing less of a threat to the economy. The report further proves that inflation has been transitory so far, though things could always change. What do you think about the inflation report?

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.