S&P 500 Gain vs Inflation Rate





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Among other major issues (e.g. war, pandemic, etc.) next week’s Good Friday shortened trading week will be impacted the BLS’s inflation report.

The inflation rate is currently at 7.9% and expectations are for a further increase to 8.5%.

Today’s chart helps prepare for next week’s report by presenting six inflation rate ranges versus the ensuing average S&P 500 12-month gain.

Conclusion…

The stock market has performed better following a relatively low inflation rate.

However, when the inflation rate reached an extremely high level (i.e., greater than 6%) as is currently the case, the stock market performed fairly well over the following 12 months.

On average.

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S&P 500 Gain vs Inflation Rate

What was the lowest U.S. inflation rate in history?

The lowest U.S. inflation rate since 1948 occurred in August 1949 and clocked in at a -3.0%.

What was the highest U.S. inflation rate in history?

The highest U.S. inflation rate since 1948 occurred in March and April of 1980 with a rate of 14.6%.

What is the inflation rate in 2022?

Inflation in 2022 is 7.5%.