Inflation has risen to levels not seen in decades. According to the Personal Consumption Expenditures measure, which the Fed uses as an inflation level gauge, the country saw a 6.2 percent increase over the year through August, far outside the Fed’s two percent typical target.
Inflation impacts Americans across all income levels. It causes many people to adjust their budgets to account for higher costs for everyday expenses such as fuel and food. Unfortunately, this also cuts into discretionary income and can impact an individual’s ability to add to investments or reach their financial goals on schedule. These higher costs also affect portfolios because companies need to manage increased fees tied to inflation as they deal with lower margins, net earnings, and stock price performance.