Expenses
Let’s face it, life is getting a lot more expensive. In October, the consumer-price index, an index that measures how much consumers pay for goods and services, skyrocketed 6.2% from last year, the most since December 1990. On Wednesday, the Federal Reserve responded to the price increases, reassuring Americans that the central bank will keep inflation in check.
Fed chair Jerome Powell said, “Price stability is one of our two goals…I assure you we will use our tools to make sure this high inflation we’re experiencing does not become entrenched.” He also mentioned Fed officials should think about speeding up the tapering of its asset purchase program.
According to a plan announced at the start of November to cut asset purchases by $15 billion per month, the Fed will conclude its asset-purchase program in mid-2022. Powell said, “It’s appropriate that we consider at the next meeting tapering faster so that it wraps up a few months earlier.” Given the inflation risks, tapering at a faster pace may be necessary.
Powell also said he wants to stop using the controversial term “transitory” to characterize inflation — he warned inflationary pressures will “linger well into next year.”
Investing has never been more important than in the current state of our economy. Your dollars are losing value. Your paycheck is losing value. By investing, you can take control of your dollars and reduce the pain of inflation.
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.
