Retirement Planners of America’s Senior Retirement Planner Ken Moraif reviews the economy and market events for the market week ending February 16, 2024. Learn more or sign up for RPOA’s weekly Market Alerts at #retirementplanning​​​
Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023​​​…(read more)

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Inflation Came In Hot, Is That Bad? – Weekly Market Alert

Inflation has been a hot topic in the financial markets recently, with worries about rising prices and the potential impact on the economy. Last week, the latest inflation numbers were released, and they came in hotter than expected.

The consumer price index (CPI), a key measure of inflation, rose 0.9% in September, well above the 0.5% increase that economists had forecasted. This marked the largest monthly increase in inflation in 13 years. The annual inflation rate now stands at 5.4%, the highest it has been since 2008.

So, is this bad news? Inflation can be a concerning indicator for the economy, as it erodes the purchasing power of consumers and can lead to higher costs for businesses. However, it’s important to look at the bigger picture and consider the reasons behind the rise in inflation.

One factor driving the increase in prices is the ongoing supply chain disruptions and shortages that have plagued the global economy. The pandemic has caused disruptions in production and shipping, leading to a scarcity of certain goods and materials. This has pushed up prices as demand outstrips supply, particularly in sectors like automobiles, housing, and energy.

Another factor contributing to the inflationary pressures is the surge in consumer spending as the economy reopens. The combination of pent-up demand and ample fiscal stimulus has led to a sharp increase in consumer spending, which has put upward pressure on prices.

Additionally, the unprecedented monetary stimulus by central banks around the world has injected large amounts of liquidity into the financial system, which could also contribute to inflationary pressures.

While the rise in inflation is certainly noteworthy, it’s important to keep in mind that some level of inflation is considered normal and even healthy for the economy. Central banks typically target an inflation rate of around 2% to support economic growth and ensure price stability.

That being said, persistent and high inflation could pose risks to the economy, particularly if it leads to a wage-price spiral and erodes consumer confidence. It could also prompt central banks to tighten monetary policy, potentially slowing down economic growth.

For investors, the rise in inflation reinforces the importance of diversification and hedging against inflationary pressures. Inflation-linked assets like real estate, commodities, and TIPS (Treasury Inflation-Protected Securities) can provide a hedge against rising prices.

In conclusion, while the latest inflation numbers came in hot, it’s important to assess the underlying factors behind the rise and consider the potential implications for the economy. Keeping a close eye on inflation and its impact on financial markets will be crucial in the coming months.