Inflation, Interest Rates, & Indiana Jones
Stop me if you heard this already—roughly half of the country's population wasn’t alive last time inflation was at this level.
It’s true. According to IMDb.com, Raiders of the Lost Ark was the #1 movie at the box office the last time prices were rising at a rate of 9% a year.
In economic circles, the most widely-followed inflation barometer, the Consumer Price Index, is considered a lagging indicator, meaning that by the time it’s reported, prices likely have changed. The question is, are prices continuing to trend higher or are they moving lower?
The Fed will attempt to answer that question at its July meeting later this month, when it makes a decision about short-term interest rates. There’s speculation rates could jump as much as 1% to curb inflation. But the Fed has to watch for a backfire, as a 1% move may send a desperate signal to the financial markets.
High inflation is a pain in the wallet, but nothing lasts forever. In the meantime, try not to watch the markets too closely, and go to the movies this summer. Who knows? We might be watching history in the making.
Mary may be reached at (520) 495-2800 or Mary@schulzfinancialgroup.com.
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Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.
This material was prepared by MarketingPro, Inc. for use by Mary Schulz