Why "Normal" Prices Aren’t Coming Back

 

A client recently asked if we’re ever going back to the Fed’s 2% inflation target. The short answer: prepare to stay annoyed.

 

We were spoiled in the 2010s with a 1.8% average. That decade was a financial nap, which is why our current level feels like a bucket of ice water to the face.

 

Usually, when inflation hits 9%, a recession follows to "fix" prices. This time, we skipped the recession. That sounds good, but it means prices never got the memo to stop climbing. We’ve seen a 26% total price jump this decade.

 

The Bottom Line

 

2% annual inflation over a decade equals 22% higher prices; 3% inflation jumps that to 34%. Between government spending and global shifts, 3% is likely the new "normal".

 

The experts can't predict where this goes next, and neither can we. But since we aren't going back to 2019 prices, your capital needs to work harder than ever just to keep pace. This is why a professionally managed portfolio is no longer a luxury – it’s a necessity to ensure your purchasing power doesn't vanish into thin air.

 

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