AFA Blog

The Shadow of Inflation

The Shadow of Inflation

The Shadow of Inflation

How could recent legislation impact the economy?

Provided by American Financial Advisors
 
We are sure you’ve heard that the House recently passed the Senate another round of stimulus to try and counteract the economic effects of the COVID-19 pandemic. The new stimulus package could narrow income eligibility to receive a stimulus check, while expanding other types of eligibility and broadening unemployment benefits.1,2
 
Many are left wondering how the additional stimulus package will affect the economy and the financial markets down the line. The volatility seen in 2020 has continued into 2021, while some sectors experienced a boom as The Federal Reserve guided short-term interest rates at-or-near zero.
 
But remember, long-term rates have been trending higher for the past seven months. Traditional 30-year-mortgage rates increased to 3.23%, which is the largest single-week increase in a year. Because mortgage rates are tied to 10-year Treasury rates, an increase may indicate that the specter of inflation is looming.3
 
We’re paying close attention to the markets, and we’ve factored inflation changes into your investment strategy. But as always, if you’re concerned about something you’ve seen in the news, please don’t hesitate to contact our office.
 

If you have questions or would like to learn more we invite you to call us at (770) 977-2434 or send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. .

 
Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. 
 
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
  
Citations:
1. CNBC.com, March 3, 2021
2. CNN.com, March 3, 2021
3. Axios.com, March 3, 2021
 
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