Hey Lizzie,
Inflation is back, rates are going up.
Yes, inflation is creeping back up, but let's put things in perspective. While the inflation rate has risen, it is something to be concerned about, but not necessarily feared at this point. A little bit of inflation is a good thing!
On the other hand, rising short term rates should be welcomed and not feared. Remember, interest rates are still pretty darn low and, as such, we should want higher rates. On the other hand, while the Fed does control the extreme short term rates, i.e. Fed Funds, longer term rates, while they have increased, are still pretty low, also.
The low level of the US Dollar has the potential to make our imported goods more expensive. However, the US Consumer is extremely fickle and manufactuers know this. Therefore, prices have not risen as much. The US Consumer has extracted value from vendors since foreign vendors are sacrificing potential profit margins. Furthermore, given the dollar's relatively low level, our markets look more "attractive" to foreign investors. While our stock market is not particularly cheap, it isn't "expensive", either.
Regards,
Dave |
