• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Used car prices

According to the Manheim Used Vehicle Value Index, in the first half of October, wholesale used vehicle prices fell 2% from the month before.

The index currently reads 200.5, representing a 10.3% decline from October 2021.

The drop was seen across the board. Luxury cars led the pack with a 13.5% year-over-year decline in prices, followed by SUVs (-12.3%), midsize cars (-10.4%), pickup trucks (-8.4%), vans (-6.3%) and compact cars (-5.4%).

Substantial year-over-year declines in used car prices could be a sign that hot inflation is finally cooling off.

When surging used car prices started contributing to inflation in December 2021’s CPI report from the Bureau of Labor Statistics, White House economic advisor Jared Bernstein called it “remarkable and revealing.”

“For one, it's a reminder of how extremely unusual this current inflation is,” he said in a tweet. “The world has not forgotten how to produce new (and thus used) cars and we should expect this series to revert once the underlying supply constraint eases.”

Invest in real estate without the headache of being a landlord

Imagine owning a portfolio of thousands of well-managed single family rentals or a collection of cutting-edge industrial warehouses. You can now gain access to a $1B portfolio of income-producing real estate assets designed to deliver long-term growth from the comforts of your couch.

The best part? You don’t have to be a millionaire and can start investing in minutes.

Learn More

Home prices

Another big contributor to inflation is home prices — and they might be on the way down as well.

The S&P CoreLogic Case-Shiller index showed that home prices in 20 large cities in the U.S. fell 0.44% in July, marking the first decline in a decade.

Of course, houses — whether you want to buy or rent — are still a lot more expensive compared to a year ago. But experts point to how the recent sequential decline isn’t properly reflected in the inflation figures.

“We pointed out that the way these indices are constructed, that housing costs are very lagged, and they're going to continue to go up, even though as we saw the Case-Shiller Housing Index, and the National Housing Index, housing prices are going down,” Jeremy Siegel, professor of finance at the Wharton School of Business, told CNBC last month.

Should the Fed pivot?

Investors care about inflation not only because it erodes the purchasing power of money, but also that it affects what the Fed would do.

As we know, the Fed has been quite hawkish — which is one of reasons stocks are getting pummeled this year.

But Siegel suggests that instead of making decisions based on lagging indicators, the Fed “has to be forward looking.”

“They have to look at what's going on in the market, in the housing market, in the rental market, in the commodity market.”

Siegel isn’t the only one who’s questioning the Fed’s hawkish stance. Ark Invest’s Cathie Wood recently penned an open letter to the U.S. central bank.

“The Fed seems focused on two variables that, in our view, are lagging indicators — downstream inflation and employment — both of which have been sending conflicting signals and should be calling into question the Fed’s unanimous call for higher interest rates,” she said.

“Could it be that the unprecedented 13-fold increase in interest rates during the last six months — likely 16-fold come November 2 — has shocked not just the U.S. but the world and raised the risks of a deflationary bust?”

Currently, market participants expect the Fed to announce another 75 basis point rate hike in November.

Sponsored

Meet your retirement goals effortlessly

The road to retirement may seem long, but with Advisor, you can find a trusted partner to guide you every step of the way

Advisor matches you with vetted financial advisors that offer personalized advice to help you to make the right choices, invest wisely, and secure the retirement you've always dreamed of. Start planning early, and get your retirement mapped out today.

Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.

†Terms and Conditions apply.