Walk around town, and those shining savings rates outside banks might catch your eye. Interestingly, rates have surged, with some accounts even reaching the golden 5% figure. This trend isn’t limited to mere savings; it also impacts CDs and money market funds. Behind this shift? The Federal Reserve’s recent endeavors to propel interest metrics to dizzying heights.
However, there’s a deeper story. Expert economist Lauren Goodwin voices a perspective that rising yields might be an inflation indicator. In fact, recent data indicates that consumer prices are accelerating, reminiscent of the 80s trend, affecting the dollar’s stronghold.
A closer look: A $1,000 stash in 2021 promised an annual yield of 0.7%. Zoom to 2023, and this shoots up to 5%. However, when inflation steps into the picture, it’s a different ballgame.
Eager to discern how various investments stack against inflation’s grip? [Jump into this simulator and get the lowdown.]
