Posted 3/31/2024, 11:47:57 PM
Inflation Tempers Record Stock Market Highs
- Media reports of record stock market highs are misleading; inflation-adjusted indexes remain below 2021 peaks
- Must adjust for inflation to compare dollar values over time; higher dollar price ≠ higher value
- Inflation erodes dollar's value, so can falsely seem like assets are more valuable
- Despite higher nominal stock prices, real (inflation-adjusted) indexes haven't exceeded 2021 highs
- Cutting rates may spur inflation more than growth; doesn't necessarily mean stocks will rise