CD Accounts Back As Inflation Hits Tipping Point?

It’s BAAAACK. And, it may be time to hold on to our inflating butts as well as dust off the low interest bank savings & CD accounts we’ve been stuck with. The producer price index last month rose at a 6.2% annual clip, up from March’s 4.2% spike. It’s the biggest annual jump since such record-keeping started in late 2010. Then, James Mackintosh in the WSJ noted that “Inflation’s Magic Number is Four.”

Do the math, he said and concluded there’s a good reason “stocks are usually lower after inflation breaches” that 4% “tipping point”. Mr. Mackintosh’s stock vs bond investment analysis is actually quite complicated. But, it comes down to this: “The market [begins to seriously] focus on the danger of inflation instead of the rewards from the economy that’s creating the inflation.” And, that’s when stock investments are maybe not so smart.

The question for us average folks, of course, is whether the latest inflationary numbers are a blip or one of Jesus’ obvious “signs” in the sky. The WSJ suggests the Fed’s “inflationary” policies under Chairman Powell’s leadership are a gamble and there’s too many cards yet to be played. I dunno. President Biden’s plan to spend $4 trillion on a progressive wish list and a national debt nearing the peak of Mt. Tabor would suggest the worst…and best (for savings accounts)…is yet to come.

Davd Soul