on April 21, 2026
Inflation is a natural part of economic growth and changes in the market. Supply and demand constantly shift, affected by global trade and tariffs, the climate (e.g., a drought affecting almond farmers), and consumer sentiments. This is a complex dance, and it’s difficult to predict how the market will behavior in the future. All we can do is use the information we have today and set ourselves up for success as best as we can.
It is no secret that prices have been rising over the past few years. Food is 19.1% more than it was in January, 2022, house prices are at an all-time high, and healthcare costs have skyrocketed for millions of Americans. The “blame” is not straightforward, however, since many factors contribute to inflation. Part of inflation is simply linked to business growth, and the innate goal to expand and become more profitable. Part of it has to do with tariffs, since price increases are often passed along to the consumer. And another part has to do with global tensions and political maneuverings.
While many media outlets are trying to drum up fear (and, thus, gain more clicks and views), I’m here to tell you that fear won’t get you very far, and it’s much better to keep a level head and approach inflation with sense and strategy.
Historical Inflation
Steady inflation—and its opposite, deflation—have been the norm throughout US history. It is unusual for inflation to stay level or steady for more than a few years. Rather, we have experienced several periods where prices have risen (or dropped) dramatically. One of the worst inflationary periods in the US was during and just after World War I. Dave Roos of History.com reports that, “The price of just about everything—food, clothing, household goods—more than doubled. The largest single-year price increase during the post-World War I era was 23.7 percent from June 1919 to June 1920. But taken as a whole, prices surged more than 80 percent from late 1916 to mid-1920.”
Conversely, the most dramatic period of deflation occurred during the Great Depression, when consumers had little money to spare and prices dropped to encourage them to buy what they could. This demonstrates that inflation isn’t necessarily a bad thing. Rather, it can signify growth and consumer spending power.
Another period of inflation occurred in the 1970s, with the oil crisis in the Middle East. OPEC (the Organization of Arab Petroleum Exporting Countries) placed an embargo on the US because of our involvement in the Arab-Israeli war. Energy prices soared, and consumers did not have the buying power to keep up. Because of these circumstances, this period is said to have experienced “stagflation” (inflation in prices; stagnation in wages and economic growth).
What To Do
Today, we can look back at eras of high inflation and learn from them. One of the biggest lessons is that, yes, these times pass and the US economy keeps going. We are too large and resilient to not forge ahead. Growth, success, and adaptation are pillars of our capitalist society, and I’m certain our nation’s businesses will weather any economic turmoil.
In the meantime, it’s a good idea to keep a level head and not make any drastic financial moves. Instead, consult your financial advisor, adjust your investments as advised, and ride out the storm. It’s also a good idea to continue to contribute to an emergency savings account, just in case the prices of certain items increase dramatically for a time. In sum: stay calm, do not make any panic-based decisions, and talk to a trusted financial advisor.