I wanted to share an interesting experience I had in the summer of 2024. I was at the swimming pool with my kids when I struck up a conversation with a Finance Professor from Auburn University. Our discussion revolved around a hot topic in the Real Estate and Finance world: whether the Federal Reserve would continue cutting interest rates. The Professor firmly believed that the Fed would cut rates because “inflation was over,” citing the declining PCE index as evidence. While I understood his viewpoint, I couldn’t help but respond, “What world do you live on? Inflation is just starting.”
Fast forward to February 2025, and we’re seeing inflation numbers still running high, with CPI increasing to 3% and Core inflation at 3.3%. It’s a testament to the unpredictable nature of economic trends.
The moral of this story is to trust your instincts alongside academic insights. While the Fed and academic circles have their perspectives, they may not always align with the everyday experiences of Americans. It’s important to remember that inflation is not merely about rising prices but about the devaluation of the dollar.
Here’s to making informed decisions and staying ahead of the curve.
