Please ensure Javascript is enabled for purposes of website accessibility
What are your plans to protect your budget against inflation in a rising-rate environment?

Share This Post

Since December 2021, I’ve been predicting short-term rates would be going up and hitting the 6.0%+ range. That is still going to be the case.

Why do I believe that?

My key indicators are as follows:

  • three+one-economic-forecast-liquidity-managementEnergy prices are back on the rise and affecting the cost of transportation, chemicals, farm fertilizers, delivery services, etc. All elements of our life will have ongoing price pressures as a result.
  • Wages continue to rise, as witnessed in bargaining terms negotiated by the unions, coupled with the solicitation of new talent for companies.
  • Higher-end retail sales continue to signal consumers’ strong buying power.
  • The U.S. economy continues to grow. As stated at the end of 2022, we haven’t yet seen—and will not see—a recession this year.
  • As for next year, there are signals that recessionary signs are looming for the second half of 2024, but that will not be enough for the Federal Reserve to ease short-term rates, despite the threat of stagflation, an economic environment like the 1970s, with negative growth, and coupled with higher interest rates.
  • Despite Federal Reserve stats, healthcare costs will continue to rise at near double-digit levels, which will put additional pressures on inflation levels.
  • Initiatives addressing climate change will be expensive and require significant investments, leading to more spending and higher costs.
  • The impact of student-loan repayments on the economy will need to be watched carefully as we roll into 2024.

Beneath the surface, inflation stands above 3.0% and will edge back up, given the factors listed above.

So, what are your plans to protect your budget against inflation in a rising-rate environment?

More To Explore

Treasurer Chris Lauzen Honored with 2025 cashVest National Leadership Award

With strong leadership and smart financial tools, Kane County is proving what’s possible when public finance is approached with vision and discipline. Congratulations to Treasurer ...
Read More

Need the Revenue? You Might Be Sitting on It.

If declining revenue is keeping you up at night, it’s time to take a closer look at your cash.
Read More