Ter Scott, Financial Consultant shares Acorns Article, It’s not luck, it’s the Fed...

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In the Markets The markets ended last week on an upswing, thanks in part to some encouraging news on inflation. March’s inflation rate eased to 5%, the lowest it’s been in almost two years. It also marks nine straight months of declines! So what’s behind this recent turnaround? The short answer is the Fed. Let’s dig deeper into what the Fed did to slow the pace of inflation — and what they may do next. Peeling back inflation Inflation is a measure of costs in four main categories: services, goods, food, and energy. Over the past month, we saw steady declines in three of the four categories: Services declined for the first time since August 2021. This decline would have been larger if not for an increase in shelter — or what you pay for rent or a mortgage. But remember, shelter is reported on a six month lag. If we were to take shelter out of the equation, March’s overall inflation rate would be a very reasonable 2.1%. Energy prices turned negative for the first time since January 2021. It’s a complete 180 for a sector that drove a large part of the sky-high inflation in 2021. It’s not luck, it’s the Fed So why is inflation lower than it was only a year ago? The answer is, it’s thanks to the Fed. Back when interest rates were 0%, money was considered “cheap,” meaning companies and consumers could take on more debt and spend more without worrying about owing a ton in interest. Over time, this behavior tends to drive prices higher. But that’s not sustainable for the economy in the long term. When all that money floods the system, it can lead to a cycle of price increases and inflation. Eventually, the Fed will step in. Typically, the ... please consider joining (start with only $5!!!) to read the entire article and more like this one.   What’s next? Investors don’t believe the Fed’s work is done yet. There are multiple ways to ... please consider joining (start with only $5!!!) to read the entire article and more like this one.   Invest with Acorns A lower inflation rate may mean you could have more cash in your pocket, so it might be time to consider adding some extra money to your investments. Even a small amount can go a long way toward reaching your goals. Was this week’s newsletter helpful? Let us know what you think! Make an Investment! Market commentary provided by Seth Wunder (Chief Investment Officer) Contributors to this week’s newsletter: Casey Hollis (Managing Editor), Caelon Smith (Investment Data Analyst), Trevir Nath (Senior Writer), Emily Gadd (Associate Editor), and Adam Grason (Senior Brand Designer).