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Market Update

Why You Should Still Care About Inflation

Inflation hasn't been much of an issue lately, but it's still a long-term threat.

Editor's note: A version of this article was initially published on May 19, 2020.

It’s fair to say that inflation has been pretty much a non-issue for a long time. I have vivid memories of hearing dire warnings about rising energy prices during my childhood in the 1970s, but since then, inflation has been in a secular decline. In fact, average inflation rates by decade have gradually stepped down, from 7.4% in the 1970s, to 5.1% in the 1980s, to 2.9% in the 1990s, to 2.5% in the 2000s, and just 1.8% in the 10 years ending in 2019. Inflation rose only 1.4% in 2020.