Part 2/10:
On January 8, 2025, U.S. Treasury Secretary Janet Yellen hinted that the COVID-19 stimulus measures might have exacerbated inflation—an acknowledgment that comes as people begin to voice fresh concerns about rising prices. The impact of inflation on the economy is profound; as costs escalate, the purchasing power of the average citizen diminishes, leading to an inevitable decrease in disposable income. This, in turn, affects stock and bond prices: higher inflation means rising interest rates, which raises the costs of mortgages and car loans, squeezing consumers even further.