Shortly after the onset of the pandemic last year, inflation became a hot topic among many.
What we have been warning readers to watch out for was just confirmed true by the source itself.
Federal Reserve Chairman Jerome Powell, admitted that inflation is proving to be more powerful and persistent than expected.
One of the most controversial talking points about inflation that particularly stood out to us was the opinion that it was transitory or temporary due to the pandemic and would not have lasting effects.
Powell said in a meeting:
“To many, it carries a time, a sense of short-lived. We tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation. I think it’s probably a good time to retire that word and try to explain more clearly what we mean.”
Currently, inflation has accelerated to its highest in nearly 40 years.
The Consumer Price Index soared 6.8% in November, exceeding the 6.7% forecast.
Powell confessed that the Fed misjudged its prediction of how long the current high inflation will last.
They now believe it will continue well into 2022 before “cooling down.”
We simply never believed in this rhetoric.
For many, rising inflation is now a bigger concern than the pandemic.
The financial well-being of our country is uncertain and multi-trillion dollar bills being passed by President Biden could make matters worse.
America is experiencing deja-vu. You might recall Ronald Reagan’s presidency when inflation hit 13.5%
People had no idea whether their salaries and savings would be able to keep up with rampaging prices.
The then-Fed Chairman Paul Volcker helped tame inflation by hiking interest rates to 22%.
Shortly after, the economy plunged into a recession.
Today, policymakers are preparing the ground to raise interest rates much earlier than they had anticipated just a few months ago.
“We will use our tools to make sure that higher inflation does not become entrenched,” Powell stated.
Brian Coulton, the chief economist for Fitch Ratings Ltd, believes it’s all part of their larger plan, saying, “It looks like the Fed wants to create some space to give them the option to raise rates well before the end of next year if they feel they need to.”But consumers are already feeling the full effects of entrenched prices right now.
Even if prices drop years from now, the money in your retirement and savings is still losing value by the minute. And if you are working, this also applies to your current salary.
In the words of President Reagan,
“Are you better off than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was? Do you feel that our security is as safe, that we’re as strong as we were four years ago?”
Still trust the Fed when they say, everything will be fine?
If you’re finally ready to take control of your financial future, call American Hartford Gold at 800-462-0071; we can help.