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Taking it back to 2020: As you recall, when COVID came to the forefront, a domino effect ensued. Businesses shut down, unemployment spiked, Americans received government checks, and in response to the upheaval, the Fed lowered interest rates. Then, upon the arrival of nationwide vaccines and a (slight) return to normalcy, the economy saw an influx of revenge spending, which led to product inventory issues, and eventually, inflation.

The Fed reaffirmed this inflation was transitory, and in fact, there are several elements of it that still are, including: Less workers (because more individuals retired earlier than expected), a dramatic decrease of immigrants entering the U.S., stimulus checks causing more individuals to remain unemployed than return to work, and lastly, an attempt to recover the U.S. supply chain after the pandemic interruption. All four of these areas are making progress, but a primary part of today’s record-breaking prices draws down to supply and demand.

A tumultuous mix: As a result, the Fed is now reversing their tool utilized in 2020 to contain inflation by slowly rising interest rates. The end-goal is to maintain unemployment rates while avoiding a recession, but the market doesn’t seem fully convinced this will work in our favor. In the midst of experiencing a yield curve inversion, continued supply chain issues and deglobalization, there are a plethora of factors at play which we have never seen before simultaneously.

Analyze your asset protection: Of all the scenarios you could experience, the conclusion has been the same for the last 100 years; the best assets you can retain for long-term growth will be equities and real estate. However, if you don’t have a plan for the worst in the short-to-mid-term, it may be time to reassess.