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Inflation is the decrease in the purchasing power of a currency. That is, when the general level of prices rise, each monetary unit can buy fewer goods and services in aggregate. The effect of inflation differs on different sectors of the economy, with some sectors being adversely affected while others benefitting.
Even if you manage to score a 1.5% APY with a no-fee online savings account, your money is still losing purchasing power to the tune of about 7% per year with inflation at current levels.
Here’s a look at how inflation affects investor sentiment, stock prices and sector performance. ... meaning they don’t lose worth like cash does, and thereby help protect your money during ...
Changes in inflation don’t directly affect private pensions but will change their relative value. If savings grow at a slower rate than inflation, the relative spending power of a pension will ...
Monetary inflation is a sustained increase in the money supply of a country (or currency area). Depending on many factors, especially public expectations, the fundamental state and development of the economy, and the transmission mechanism, it is likely to result in price inflation, which is usually just called "inflation", which is a rise in the general level of prices of goods and services.
To still get a return on their money, investors instead have to buy up other assets such as stocks and real estate, thereby bidding up the price and creating asset price inflation. When people talk about inflation, they usually refer to ordinary goods and services, which is tracked by the Consumer Price Index (CPI).
But what is inflation, and how does it affect stocks? Here's what you need to know. Skip to main content. Finance. 24/7 Help. For premium support please call: 800-290-4726 more ways to ...
If high inflation strikes the American economy, high interest rates are likely to follow. Even though rising interest rates can make all types of financing -- from credit cards to home mortgages to...