Over recent months, inflation has increased.
So how does inflation impact future stock market returns?
Today’s chart helps answer that question by presenting six inflation rate ranges versus the ensuing average S&P 500 12-month gain.
The stock market has performed better following a relatively low inflation rate.
Today’s chart illustrates that it takes a fairly noticeable increase in inflation to significantly impact future stock market returns.
The inflation rate was just reported to be 5.3%.
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 2021?
Inflation in 2021 is coming in around 2.6%.