VOO - If You Made $70000 When Trump Was Elected You'd Need $90000 Today To Keep Up | Benzinga
A fresh inflation reading for April had economists on Wednesday hopeful that a soft landing scenario is still possible for the American economy.
With consumer prices 3.4% higher than in April 2023, there's widespread expectation among pundits for the Fed to drop interest rates by at least 0.5% by the end of the year.
The S&P 500 Index, followed by ETFs such as SPDR S&P 500 ETF Trust (NYSE:SPY) and the Vanguard S&P 500 ETF (NYSE:VOO), is pricing in these hopes, climbing up about 1.5% since the markets closed on Tuesday.
How Bad Was Inflation In The Past Decade?
The most recent inflationary cycle peaked in June 2022, when the consumer price index stood 9.1% higher than the previous year.
While the rise in prices has cooled down from its more concerning readings, inflation continues to worry both the public and the Fed, with hopes to reach the ideal rate of 2% before the economy suffers too much from an overall drop in spending.
Back in 2015, the U.S. economy had the inverse problem of today. Inflation was very low, with some months even registering deflation, meaning that consumer prices were lower than the previous year. This scenario can hurt the economy as people and businesses become incentivized to pause spending in the hopes that products and services will become cheaper in the future.
The following years showed a somewhat stable trend, with the average monthly inflation for each year in the period between ...