A few quick notes on inflation:

1.) Inflation being low doesn’t mean prices are going to drop. It just means they aren’t going up as fast. That’s generally the best we can hope for as deflation (prices dropping) is considered to be very bad for an economy according to most economists. (That’s because it would encourage people NOT to spend money, creating a compounding effect, slowing the economy further)
2.) This really hurts the narrative that “Biden caused inflation”. Inflation was on the rise when Biden took office (January 20th, 2021) and now these current inflation numbers are the lowest they’ve been dating almost exactly to that time (February 2021). In my estimation, the main driver of the big inflation we saw the last few years was the massive cash infusion put into the market during COVID. Trump happened to be president during that time, but it would be naive to suggest a Democratic president wouldn’t have signed those same spending bills. At the time any president, Democratic or Republican, would have been very likely to act under the circumstances. In reality, COVID was a once in a century pandemic and it caused some very jarring impacts to the US and global economies, including that ripple effect inflation from all the COVID spending.

HOPEFULLY, this is a sign that the days of big inflation are behind us for now. Like I said, that doesn’t mean prices are coming DOWN, but hopefully you can get your pay up to where it needs to be so that these prices don’t feel so bad, and won’t be increasing as fast in the future! This is good news for us, and the market jumped about 1% in anticipation of this. It may encourage the Fed to lower interest rates, which generally corresponds to more development, business growth, an stock market growth.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

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By: Gabriela Gonzalez
Title: Inflation keeps falling and is the lowest since 2021
Sourced From: www.personalfinanceclub.com/inflation-keeps-falling-and-is-the-lowest-since-2021/
Published Date: Wed, 18 Sep 2024 02:23:22 +0000

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