Month: May 2023

Investors are worried about the current state of the economy—namely, therising costs of goods on their savings. Each dollar buys less with every passing month of higher inflation, and savings are dwindling along with the “purchasing power” of what remains. This leads people to ask where to place their money at a time like this. Although interest rate increases are terrible for borrowing money, they are great for your savings accounts. For the first time in over a decade, your normal savings could start earning reasonable risk-free interest if managed properly. Before we discuss how to navigate the road ahead, let’s examine how we got to this point and the lessons learned from prior periods of higher inflation. How We Got Here In mid-2022, the United States experienced a surge in inflation, reaching a 40-year high. This upward price trend can be attributed to a supply-demand mismatch in which an excess of money is chasing fewer goods. Despite initial claims by the Federal Reserve that inflationary pressures were “transitory” and would diminish once factories and workers resumed normal operations post-COVID-19, supply chain shortages and subsequent spikes in energy and consumer goods have persisted. The Consumer Price Index (CPI) measures the