Fed Plans to Lower Inflation
The significant impact of inflation on the value of an investment portfolio is an important consideration to understand when making strategic and tactical portfolio allocation decisions. A high inflation rate has a particularly negative impact on the value of cash and cash equivalents held in an investment portfolio.
The Federal Reserve is the U.S. government banking system responsible for creating, monitoring, and modifying national, and international, monetary policies by assessing the economic conditions and acting accordingly. Jerome Powell, Federal Reserve Chairman, recently announced the central bank’s plan to adjust U.S. monetary policies in a way that should effectively begin to reverse a recent steep rise in inflation, especially since the beginning of the COVID-19 pandemic and the associated government stimulus efforts.
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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management