Home Economy MARK-TO-MARKET: Inflation: What’s driving prices higher? | Business & Economy

MARK-TO-MARKET: Inflation: What’s driving prices higher? | Business & Economy

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Inflation is the year-over-year increase in prices for consumer goods and services. Understandably, inflation often elicits a negative response. Let’s be honest, do any of you shout, “Yes! Prices are rising!” while high-fiving fellow shoppers at your local retail checkout line? But from an economic standpoint, inflation isn’t an inherently bad thing. Rising prices typically represent a vibrant consumer demand for goods and services that ultimately drives our economy forward.

However, the key word is moderation. Historically, the U.S. Federal Reserve’s target rate of inflation is 2%. The Fed deems a 2% inflation rate as the ideal balance between economic growth and rising prices. The Fed serves as the decision-making body for U.S. monetary policy. By adjusting its monetary policy, it seeks to manipulate spending, investment, employment and inflation to promote economic growth.

But consumer prices have been steadily rising since early 2021. The…

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