by Krista Wallace, CFP®, AFC®
Every year, I try to extend the holiday season just a little bit longer – there’s something in the season that makes me want to “keep the Christmas lights up til January” (thank you, Taylor Swift) and continue to try new recipes and discover new ways to assemble the flour, sugar, and butter that appear on the counter all season long.
The chart above shows the current measures of inflation compared to their highest and lowest levels over the last 12 months. Not surprisingly, energy and vehicle costs are approaching or near their peak for this timeframe. At the same time, food still feels expensive during the holiday hosting (or is that just because I have kids at home?), and the unknown impact of tariffs. While inflation and unemployment are rising, economic growth has been above average, and many wonder how long this can continue.
In the final quarter of 2025, many of you raised questions about what might be “baking” in the economy with these three ingredients – even more so after tariffs were first announced. Analysts expressed concern about potential stagflation, which occurs when inflation and unemployment are high and economic growth is stagnant or slow.
Our investment committee is hard at work evaluating these ingredients so we can guide and direct your investments and strategize countermeasures as needed. Stagflation was resolved in the 1970s and 80s with an aggressive monetary policy from the Fed, which ultimately set the stage for decades of stable growth. Will we face a similar situation? So far, that does not appear to be the case, but we will remain vigilant.
We are thankful for the trust you place in our team and hope that you will evaluate 2025 – you can reflect on the relationships grown and the goals accomplished, and share these with your advisor during our upcoming Annual Review meetings. We’ll also be taking a look at what’s ahead for 2026 and what ingredients will be needed to master 2026’s secret recipe.