A TV sitcom from the turn of the millennium, That ‘70s Show was the story of teenage friends in the late 1970s. A period piece, the trappings of the show remind me how dramatically the life of the American consumer has changed—and yet the ’70s might come around again.
No, we are not going back to a time when the great new retail products included patented suitcases with wheels, Mr. Coffee automatic coffee makers, and Pong games. But for certain economic trends, That ’70s Show might seem more relevant once again.
Back then, inflation and interest rates were at multidecade peaks, up in the teens. Commodity prices were roaring higher, and shortages emerged. For forty years now, interest rates and inflation have been sliding: rates for each have been near zero for years.
Perhaps, finally, the trend is changing. Inflation rates and interest rates may rise again—perhaps persistently, for a period of years. No one knows for certain.
Inflation means rising prices. Just consider the changes you might have noticed recently with houses and cars and lumber, even our groceries and gasoline. Seems prices are on their way up, quickly in some places.
These things have major effects on the investment markets. Bonds and other fixed income investments may struggle if interest rates move higher; commodity producers may benefit from rising prices. Keep in mind that winners and losers emerge when things change.
We may be getting that ’70s feeling in some ways, but it’s a good reminder that history has provided a solid foundation for our work here with you.
Clients, if you would like to talk about this (or simply reminisce about the ’70s), email us or call.
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