Inflation rates—a general increase in prices--are very low. With Fed officials talking openly about low inflation and the risk of deflation, it is appropriate to examine inflation risk and how to address it. High levels of inflation erode purchasing power and the value of stocks and bonds. This week we review aspects of inflation. The
Stocks are rebounding from a rough ride, but this is characteristic of many pullbacks since the bull market began in March 2009. According to the analysis of Liz Ann Sonders of Schwab, the stock market appears to be transitioning to a market driven more by traditional fundamentals, and less by Fed policy. On the bond side, Bill Gross of PIMCO believes the Fed is overly optimistic in its outlook for declining unemployment, and the recent spike in bond yields has been overdone
Since May 22, markets have been volatile. This week we explore some of the reasons, review a colorful essay on the effects of Fed policy, and what Fed policy is doing to long-term care insurance rates.