The inflation rampage has continued for the past few months. It all kicked into high gear when the Ukraine conflict began and caused a rise in gas prices. Indeed, prices for everyday items have risen a massive 8.5% in just March of this year, the highest level since the Reagan administration. Not only does inflation hurt investors and participants in the economy, but it eats away at the value of capital and investments. Inflation could also make future company profits less valuable today and lead to higher interest rates. In reaction to this, the Central bank’s policy makers raised interest rates by 75 basis points.
Another step the government has recently taken against inflation comes from the executive branch. Specifically, President Joe Biden called on Congress to suspend the federal gas tax for 90 days in order to make gas more affordable for Americans. The federal tax currently sits at 18 cents per gallon of regular gasoline. The President has also asked states to suspend their gas taxes or find alternative ways to help. While some believe suspending the gas tax will keep demand steady and not address the actual structural problem in the market, others believe it will make a significant difference
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.