Prices rose in December by 0.2% month-to-month according to the PCE, that’s 2.6% annualized. That may seem like a small number, but compound it over a couple decades of saving for retirement and it can drastically reduce the purchasing power of an investor’s savings. Dick Young recently warned investors about the “debilitating” effects even lower levels of inflation can have on portfolios. It’s true, and that’s why Barron’s is declaring that the Fed’s “long-running battle against rising prices is not over yet.” Daniel Avis reports:
The US Federal Reserve’s favored measure of inflation ticked higher last month, according to government data published Friday, indicating that its long-running battle against rising prices is not over yet.
The latest announcement will likely ensure the US central bank keeps interest rates on hold at its next decision announcement on Wednesday, as policymakers continue talks on when to start cuts.
The personal consumption expenditures (PCE) price index rose at an annual rate of 2.6 percent last month, unchanged from November, the Department of Commerce said in a statement.
On a monthly level, headline PCE inflation rose by 0.2 percent in December, up from a 0.1 percent decline a month earlier.
Action Line: One way to combat inflation is to save til it hurts. You don’t want to get stuck running out of money in retirement. When you want some help, let’s talk. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
