In order to calm the economy and slow demand, the Federal Reserve may raise interest rates in response to rising inflation. If the central bank acts too quickly, the economy could enter a recession, which would be bad for stocks and everyone else as well. Mr. Damodaran stated, “The worse inflation is, the more severe […]

This year’s inflationary surge in America was fueled in part by anomalies and in part by demand. On the odd side, the coronavirus has led factories to close and shipping channels to get choked, limiting the supply of automobiles and couches and driving up costs. After plummeting during the epidemic, airline fares and hotel room

Because interest rates are the major weapon used by central banks to manage inflation, they tend to fluctuate in the same direction as inflation, although with lags. The Federal Reserve in the United States sets a range of its benchmark federal funds rate, which is the interbank rate on overnight deposits, to achieve a long-term

TIPS (Treasury Inflation-Protected Securities) give inflation protection. As assessed by the Consumer Price Index, the principal of a TIPS increases with inflation and falls with deflation. When a TIPS matures, the adjusted principal or the original principal, whichever is greater, is paid to you. TIPS pay a fixed rate of interest twice a year. Because

Grade inflation can be caused by a drop in academic standards, a rise in student achievement, or a combination of the two. Parents, students, and institutions can all put pressure on teachers to lower their standards. This is especially true because any school or teacher who takes a “hold out” position will put its students