Inflation May Finally Be Slowing Down! SHP Financial

Inflation has been a hot-button issue in finance and politics lately. You may have noticed changes in inflation yourself if you went to buy something and it was much more expensive than you expected. Eggs are a great example of this.[1] In 2022 the price of eggs went up by 59.9% due to an outbreak of avian influenza. Another factor was the pandemic, which caused disruptions to supply chains across the globe, causing inflation and increasing prices.[2] A few other reasons include shortages in labor, high consumer demand, and the war in Ukraine causing specific oil supply changes.[3] All of these elements have contributed to the inflation that we’ve seen recently.

Thankfully we may be cresting the wave of serious inflation. The consumer price index was at 4% year-over-year in May. This is an indication that inflation might be slowing.[4] Unfortunately, inflation is not something that can be safely reversed, but it can be slowed by central banks’ control of monetary policy as well as government spending.[5] The Federal Reserve aims for an annual inflation rate of 2%, though that target has been difficult to achieve given the factors mentioned above.[6] And although we aren’t at that 2% benchmark, the current trends in the consumer price index indicate that inflation may be slowing.

Often the way that inflation is slowed is via monetary policy, which controls money supply and interest rates and is enacted by a central bank, the Federal Reserve in the US.[6] You may have noticed that recently the cost of borrowing money has been high. If you were looking to purchase a home or take out a loan, you probably saw that interest rates on those loans are higher than you might have expected. Average interest rates on 30-year fixed home mortgages were about 7% as of June 16, 2023, compared to roughly 3.5% in 2021.[7][8] The relevant part here is that when these rates are higher, people may have a smaller budget and spend less, which puts downward pressure on prices, forcing businesses to lower the price of their products, which in turn helps inflation decrease. The same can be said about any business that carries debt and must buy or sell goods and/or services.

One strategy that can be important for retirement is to plan around inflation. Because inflation can erode the value of your cash assets over time, it can be prudent to consider how you will combat that erosion. If you are looking for someone to guide you through the process of retirement planning, Click HERE to reach out to one of our financial advisors at SHP Financial   today for a complimentary review of your finances.


The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
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