Time For a Quick Quiz!

Pop quiz!

Are these statements true or false?

Any time food or gas prices go up, we’re seeing inflation at work.

Inflation is always bad for the economy.

The consumer price index (CPI) and the personal consumption expenditures (PCE) price index are measures of inflation.

Believe it or not, not one of those is a true statement. They’re all false.

Prices change for many reasons, so they aren’t always signs of inflation. And a little inflation is generally expected in a healthy economy. (1)

As for price indexes, those measure general price levels against some base year. Inflation describes how much that price index grows over time. (2)

Those are just a few facts that are important to know about inflation. How many others do you know?

Put yourself to the test with the inflation quiz in this month’s Visual Insights Newsletter.

Inflation can make any of us anxious. We can’t predict it, and that can be a real source of stress. But if we know the facts, it can be much easier to cut through the noise and make smarter financial choices in the face of rising inflation.

So, what do you really know about inflation? What new facts could you learn?

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Stagflation: Bell Bottoms & Platform Shoes?

Markets gifted us with another burst of volatility and headlines are looking apocalyptic again.

Some folks might think it's time to bail on markets for the summer, but I'll tell you why that thinking is a mistake.

First, let's peel back some layers to explore what's driving markets. The latest selloff was largely driven by concerns about how the pace of Federal Reserve interest rate hikes could affect economic growth.(1) The Fed's "hawkish" policy of rapidly raising interest rates to bring down inflation seems likely to take a chunk out of economic growth.

Is a recession on the way?

Bear Country! 🐻 What's Next?

Well, it happened. We knew that markets were going to continue their wild ride, and here we are. Stocks slid into bear market territory after a bad May inflation report showed that prices rose at the fastest pace since 1981.(1) It's clear that the Federal Reserve's efforts to cool inflation haven't borne fruit yet, and investors are nervous.

In response to these concerns about inflation, the Fed raised the benchmark interest rate by another 0.75 points, the most aggressive hike in nearly three decades.(2) Their move will hopefully yield relief from rising prices but also means the cost of borrowing will go up, which could dent business and consumer spending.

Should I be worried about markets?