Inflation's Overreach

Inflation's Overreach

May 04, 2022

What do The Dukes of Hazzard, M*A*S*H, and The Love Boat all have in common? They were top-rated television programs in 1982; the last time inflation was hovering in the 7% range.

When inflation is running hot, you can feel its overreach in almost every corner of the economy. People see it when they buy gas and at the grocery store, but its influence touches mortgage rates, credit card debt, and overall consumer confidence.

Managing inflation is the job of the Federal Reserve, and the Fed’s approach with monetary policy reflects its near single-minded focus on higher prices in 2022. The Fed raised short-term interest rates at its March meeting, and Fed Chair Powell signaled more is needed before the Fed can wrestle control of inflation.

This week the Fed announced it would increase its benchmark interest rate by a half-percentage point. This is the most aggressive move to combat inflation since 2000. They also warned of future increases, so no this is not the end. In the months ahead, it’s possible inflation reports will bring back memories of Laverne & Shirley and Magnum, P.I. Just remember, it is important to evaluate your spending and reassess when needed. 

If you’re feeling an inflation pinch, please reach out. There are ways to help alleviate financial stressors that we can help you with. Please know we are always monitoring the situation and we will keep you updated if we believe any portfolio changes are needed.