Inflation pressure is not going to go away: As we head to the holiday season, cost of living will stay high. If you are young and don’t remember past periods of high inflation, and high cost of capital, get used to it. Data that came in on October 12th, confirms that inflation has increased slightly and that cost of living will stay high for longer than expected. Month over month, overall inflation increased 0.4% in September. In August, the month-over-month rate was 0.6%.

Core inflation, the measure of prices excluding volatile food and gas prices, is considered by the Fed to be the best measure of where inflation is headed. In September, core inflation posted a second consecutive monthly gain of 0.3%, which is roughly half the rate of inflation during summer 2022. That’s still a bit too high, based on the Fed’s target.

What does high inflation mean your wallet? Rising costs are causing household budgets to tighten.  Aside from higher prices on everything you buy, persistently high inflation means that interest rates on credit cards, loans and auto financing will also remain elevated. That’s because the Fed has been trying to slow inflation through a series of rate hikes that started in March 2022. The central bank’s benchmark rate is now in a range of 5.25% to 5.5%, the highest in 22 years.

Final Takeaway: Geopolitical tension will continue to stay high, as Putin’s war in Ukraine intensifies as we head into the winter. The Russians will use market chaos to their advantage and will seek to tighten oil supply to keep crude oil price high. This is what they need to finance the war against Ukraine. The tragic war between Israel and Hamas will be long and will deteriorate the regional stability and undermine the Saudi and Israel peace negotiations. Potential regional escalation with Syria and Lebanon can impact supply chain, and food and energy supplies and increase market volatility. As we head into election in 2024 in the US, expect tensions and interference from different forces.

Act Now: If you are an employee, seek a salary increase and negotiate like there is no tomorrow. Show your employer that you know that you know prices will stay high at least for 24 months. If you are buying a house, or trying to sell a house, expect tough time ahead as the market conditions have completely changed. Decrease expenditure for non-priority items as you prepare for the holiday season. Even as you think of present, invest in yourself and in the people around you. If you are an entrepreneur raising capital, talk to family offices and high net individuals and stay away from Venture Capitalist as they are too expensive.