Today's Scoop:

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Here's what you need to know today...

1. Policymakers are ready to raise interest rates further.

2. Supply chains are finally back to normal, delivering goods around the world on time.

3. Used car prices are surging again.

S&P 500: 3,986.371Mo: -3% | 1Yr: -4% | 5Yr: +43%

The market sank lower today after policymakers warned of higher interest rates. The Chairman of the Federal Reserve said the economy is still showing signs of overheating, and the Fed is willing to raise interest rates higher and keep them high for longer if necessary to get inflation under control. [🤓]

Supply chains have finally cleared up, delivering goods around the world on time. The pandemic and lockdowns disrupted global trade, shipping, and transportation routes, making it more difficult for businesses to get the supplies they needed. Those shortages drove prices higher, aka inflation. The Federal Reserve Bank of New York said global supply chains are officially back to normal.

Used car prices are spiking again. During the pandemic, production delays caused shortages in new cars and directed demand toward used vehicles, driving prices higher. After a brief decline from peak prices, Cox’s Manheim Used Vehicle Value Index jumped 4.3% last month, the largest February jump since 2009.

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• Exxon Mobil sued over nooses repeatedly found in refinery

• Sofi Bank sues to block student loan payment pause

• JPMorgan now has more employees in Texas than New York

• WeightWatchers moves into obesity drug prescriptions

• Best Buy delivers at-home hospitals

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Inflation

Inflation is a rate of change. It measures how quickly the prices of goods and services are rising. Things typically get more expensive over time. A bottle of coke is no longer 25 cents, but that's part of a normal economy. Trying to keep all prices the same forever would be like stopping the wind from blowing.

When investors talk about inflation negatively, they're talking about the risk of high inflation. Policymakers consider living costs rising by about 2% per year as normal inflation. When prices rise more quickly than that, as they have been for the past two years, it becomes a problem, especially if our incomes aren't keeping up. You're making less real money if your wages aren't increasing by the same amount as inflation. Those dollars can't buy as much stuff. Investing is one of the only ways to beat inflation long term. We have to hold our value in assets that appreciate.

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