In recent months, the word “inflation” has been making the rounds in the American news cycle. This must mean that inflation, the price of goods, the Fed etc. are top of mind for Americans, right? Is there something to be worried about?
Inflation over the past year has been on the uptick. The U.S Bureau of Labor Statistic’s Consumer Price Index (CPI), a metric used to gauge the price of consumer goods has risen 5.3% over the year ending August 2021 (notably, however, increasing only 0.3% in the most CPI report).
The Federal Reservice itself acknowledges that the inflation rate will be somewhat high this year but is expected to level out by year’s end. They believe the upward trajectory of inflation was because of supply-chain bottlenecks and shortages primarily due to the pandemic. As supply chains continue to heal, The Fed expects prices to stabilize, and inflation to move closer to the Fed’s long-term target of 2%.
Interestingly enough, some metrics indicate that the public’s concern about inflation show that fears are being abated, which aligns with the Fed’s outlook. Tracking Google searches have been a way pollsters and social scientist alike use to gauge public interest in any given topic. Per data collected by Bespoke Investment Group, google searches for inflation and inflation related terms peaked in Spring 2021. It now appears public interest has lowered, per a 1/3 reduction in google searches. This suggests confidence in economic recovery. Of course google searches are just one of many metrics used to take the public’s temperature.
As with all matters relating to the economy, one should always have a “wait and see” approach, as no one has a crystal ball.
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice.