9. Where the Economy Stands — Today
- U.S. inflation slowed to ~2.3% in April–May 2025—low not seen since early 2021 (stlouisfed.org, tradingeconomics.com).
- Core CPI remains ~2.8%, and ongoing shelter costs continue to drive it.
- Consumer spending has softened, with savings up as people tighten their belts.
- The Fed stays alert—no rush to cut rates amid unpredictable inflation signals.
10. Doing Nothing Is the Costliest Decision
Imagine inflation averaging just 3% annually:
- Your $10,000 dwindles to ~$7,400 in 10 years.
- That’s $2,600 missing out on potential use, growth, or secure living.
It is not about being alarmist—it is about being realistic. Inflation is the stealth saboteur of savings, but with action, you can neutralize its impact.
11. Your 5‑Step Anti‑Inflation Strategy
- Understand your current real return
– Track your portfolio’s annual returns. Subtract current inflation. Is it positive? - Prioritize inflation‑hedged assets
– Build a core of TIPS, high-dividend stocks, and I Bonds. - Diversify across inflation-fighting tools
– Think real estate, commodities, equities—each reacts differently to inflation. - Review and rebalance regularly
– Shift as markets and inflation trends evolve—typically every 6–12 months. - Stay financially literate
– Read CPI/PCE news, Fed announcements, housing stats, and inflation analysis. Knowledge gives you control.
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