Low inflation may seem like good news…
But, it has a darker side.
This week, Craig Siminski, of CMS Retirement Income Planning, helps us see which factors might be driving down inflation in the United States:
The Federal Open Market Committee raises or lowers interest rates to help keep inflation near a 2% target, which is the rate believed to be consistent with the Federal Reserve’s dual mandate to seek stable prices and maximum employment.
According to the personal consumption expenditures (PCE) price index — the Fed’s preferred inflation gauge — core prices (excluding food and energy) rose just 1.6% year-over-year in June 2019, even though the unemployment rate was sitting near 50-year lows (3.7%).
In the past, tight labor markets have paved the way to higher wages and inflation. The last time unemployment was close to today’s levels (3.5% in late 1969), overall inflation was running closer to 6.0% and housing costs were rising even faster.
Low inflation may seem like good news, especially for cash-strapped consumers and retirees living on fixed incomes, but…
To Read the Entire Article, Please Click Here.
Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 21 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
Please let Craig know that the Green Bay News Network Sent You!