6 Ways Inflation is Impacting the Economy This Fall

November 22, 2021

Everywhere you look, people are talking about inflation – and it’s understandable why. Inflation, as measured by the Consumer Price Index, rose 6.2% from October 2020, which is the highest rise since late 1990. Even if you remove food and energy prices for their known volatility and vulnerability to supply chain issues, the core CPI number was still up 4.6%.


Price increases have been driven largely by increased demand following a dormant economy in 2020, lower unemployment rates, and more financial stability for many American households. However, supply chain disruptions coupled with this increased demand have contributed to the inflation spike.


Secretary of the Treasury Janet Yellen and Chair of the Federal Reserve Jerome Powell continue to project that inflation is temporary – although it has lasted longer than they originally expected. The government will do what’s necessary using the tools at their disposal to keep inflation at a reasonable level, and it seems that the markets have anticipated higher inflation and begun to price it in.


In the meantime, here’s how inflation has affected the economy and what we expect to see in the near future.


  • The IRS published higher tax brackets for 2022 in response to higher inflation, but if and when the actual rates will change is still to be determined.
  • Wages started to increase in October 2021, but increased prices wiped out these gains – producing a 5% reduction in real wages after inflation from September to October, according to the U.S. Department of Labor.
  • When announced on Nov. 10, 2021, the equity markets reacted negatively to the news, and bond yields rose.
  • The Federal Reserve will begin to taper bond purchases as the economy strengthens and inflation increases, which is welcome news to investors. Should the economy turn south, this gives the Fed some leeway to deploy tools to protect American families.
  • Oklahoma’s local economy continues to improve with unemployment declining to the lowest point in two and a half years. Oklahoma City, in particular, has an unemployment rate of only 1.9%, which is the lowest on record and the second lowest in the country for large metropolitan areas.
  • Although low unemployment is positive news, it could make job vacancies harder to fill and contribute to price increases at local businesses as they increase wages to attract workers.


Inflation and the stock and bond markets are interconnected, but their relationship is complex. The important things to know are that our team at Wymer Brownlee is monitoring the situation daily, we’re available to answer your questions, and having a financial plan tailored to your long-term goals can alleviate concern about activity in the short run.


Wishing you happy holidays and a meaningful final quarter of 2021!











The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.



Category: , ,

Related Blog Articles

How Can You Start Living a Richer Life This Spring?

How Can You Start Living a Richer Life This Spring?

Maximizing Charitable Impact, Minimizing Taxes: 5 Tax-Efficient Giving Strategies

Maximizing Charitable Impact, Minimizing Taxes: 5 Tax-Efficient Giving Strategies

Wealth and Wellness: A Practical Approach to Improving Your Relationship with Money

Wealth and Wellness: A Practical Approach to Improving Your Relationship with Money