I read an article today about the PCE Index. I am a beginner in trying to understand the difference in supply side inflation and demand side inflation. The demand is still great as people are maxing out credit cards and spending savings. The supply is hurt by a labor shortage and higher production costs. Is an annual rate of 4.5% for an adjusted PCE Index livable? How do you think it will affect inflation? My guess as a novice is that it is not good news. Thanks Akash for the information.
Inflation is a tricky subject as there is no one size fits all approach. I believe an annual rate of 4.5% is livable, but the real question is how long the U.S. economy can reasonably stay at that rate. The main fear is wage-price spiral, but as of right now, the risk seems contained. Thank you for reading, Douglas!
I continue to believe that the US economy and consumer has a tolerance for an inflation level higher than the Feds 2% target. The question is if the Fed will understand and accept that.
I agree 2% feels far-fetched right now with our current inflation levels. I believe the Fed will compromise at around 3-4%. Thank you so much for reading, Beachman!
Budgeting is going to be so much more important now! Instead of wasting money, people will find ways to stretch their dollar as inflation continues.
As long as you have a three to a six-month emergency fund, the stock market fluctuations should not bother you too much. Also, remember most wealth is created during recessions!
Layoffs hurt everyone in the company but especially the employees. The people who stay have to work extra roles because there aren't enough people in the workplace. According to corporate America, "the grind never stops 🙃."
It depends if you are taking a passive or active approach to invest!
For passive, it can be as simple as owning a stock portfolio.
Owning a tiny home would fall into the active category. Before investing in active projects, you would have to take considerations such as how much time you can set aside. Additionally, this form of investing has more risk-to-reward, so make sure this falls within your risk tolerance!
That pesky transitional inflation just seems to keep lingering on for some strange reason.
I wonder why 🤔 Thank you for all your support, Bert!
Well summarized as per usual! Great stuff.
I'm glad you enjoy the newsletter :)
I read an article today about the PCE Index. I am a beginner in trying to understand the difference in supply side inflation and demand side inflation. The demand is still great as people are maxing out credit cards and spending savings. The supply is hurt by a labor shortage and higher production costs. Is an annual rate of 4.5% for an adjusted PCE Index livable? How do you think it will affect inflation? My guess as a novice is that it is not good news. Thanks Akash for the information.
Inflation is a tricky subject as there is no one size fits all approach. I believe an annual rate of 4.5% is livable, but the real question is how long the U.S. economy can reasonably stay at that rate. The main fear is wage-price spiral, but as of right now, the risk seems contained. Thank you for reading, Douglas!
I continue to believe that the US economy and consumer has a tolerance for an inflation level higher than the Feds 2% target. The question is if the Fed will understand and accept that.
I agree 2% feels far-fetched right now with our current inflation levels. I believe the Fed will compromise at around 3-4%. Thank you so much for reading, Beachman!
Budgeting is going to be so much more important now! Instead of wasting money, people will find ways to stretch their dollar as inflation continues.
As long as you have a three to a six-month emergency fund, the stock market fluctuations should not bother you too much. Also, remember most wealth is created during recessions!
Layoffs hurt everyone in the company but especially the employees. The people who stay have to work extra roles because there aren't enough people in the workplace. According to corporate America, "the grind never stops 🙃."
Thank you so much for reading, Marizsa :)
It depends if you are taking a passive or active approach to invest!
For passive, it can be as simple as owning a stock portfolio.
Owning a tiny home would fall into the active category. Before investing in active projects, you would have to take considerations such as how much time you can set aside. Additionally, this form of investing has more risk-to-reward, so make sure this falls within your risk tolerance!