Inflation Is Down So Why Does Everything Still Feel Expensive

President Trump says that inflation is gone, but Jerome Powell, who is the chairman at the Federal Reserve Bank, says that, quote, inflation progress has stalled. So what's going on? Because in 2022, we saw 9.1% inflation. Today, in 2026, we get the news that inflation has fallen to around 3%, but nothing feels cheaper. In fact, things keep feeling more and more expensive. And the first reason why that I want you to understand is that inflation is a compounding number. What that means is when you hear the news that inflation is 3%, it doesn't mean that the prices of things have fallen. It means the rate at which the prices of things are growing is lower than before. So the prices of things are still growing, they're just not growing as fast as they were before. So when you get the news that prices of things are rising by, say, 3% in 2026, that's on top of the price growth that we saw in 2025. It's on top of the price growth we saw in 2024. It's on top of the price growth in 2023. It's on top of the price growth in 2022, and on and on and on. Now, this isn't a new trend. The Federal Reserve Bank, which is the central bank here in the United States, they're in charge of monitoring inflation and taming inflation. They have publicly stated that they have a goal of 2% inflation. It's not 0% inflation, it's 2% inflation. Now, when you hear that, you might say, well, Jaspreet, that's a little bit weird. Why do they want the prices of things to rise? And the reason why is because in this system, inflation is designed to benefit asset prices, and the Federal Reserve Bank is ultimately in the business of trying to protect asset owners. Now, they don't say that per se, but we can infer that because what we've seen throughout history is that inflation benefits asset prices, that stock prices, real estate prices, and other asset prices. But wages have not kept up with inflation for the last number of decades. We can just take a look at how the prices of things have grown from 1971 to today, because between 1971 to the 2021 period, what we saw is that incomes in the United States have grown by around 600%, the median income. The price of a new car has grown by around 800%. The price of buying a new house has grown by purchasing around 1,200%. And we're looking at the median house in America. The price of going to college has gone up by around 2,000%. So, yes, incomes have gone up, but they haven't gone up fast enough to keep up with the cost of living. And this accelerated after the pandemic, because after the pandemic, what we have seen between 2020 to 2025 is that the prices of things, according to the inflation numbers, the CPI numbers, have grown by around 23.5%, while the reported wage growth over the same five years was about 21.8%, which means over the last five years, the reported inflation is higher than the reported growth in incomes. But the second problem is the reported inflation numbers don't give the full picture as to the price growth of things, because inflation in the United States is often measured through a number called CPI. And CPI is a broad inflation measure. It's a basket of goods. And then they measure how much the prices of all these things have risen, and then they average it together, and then they tell you what inflation is. The problem is there are certain things in the CPI number that you're buying very regularly, and certain things that you're very rarely buying, and they might not be in proportion to the rate at which you buy them. For example, CPI includes things like buying a new car, furniture, TVs, and even a house. How often are you buying all those things? But it also underweights things that you buy very regularly, things like groceries, gas, health insurance, and rent. And this is where the general rule of thumb on the internet now has been take CPI, which is the inflation number, multiply by two, and that's closer to the real inflation that many people are feeling. So if inflation is 3%, that's what the report says, the real inflation rate for many people is actually closer to 6%. And if your savings are not growing by that amount, so if your savings are not growing by 6%, your savings are effectively losing value. If your income is not growing by that, you're effectively becoming poorer and poorer each year because the cost of living keeps going up, but your incomes are not growing fast enough to keep up with the cost of living. And unfortunately, the average person in America is not seeing their income even rise with the reported CPI numbers because wage growth hasn't kept up with CPI post pandemic. And this is where the question is, what is this going to mean in the future and what is going to actually happen? Because now what we're seeing happen is number one, credit card debt keeps breaking new record highs. Part of the reason for that is people don't want to lower their lifestyles, so what do we do? We just spend that money that we don't have with the Amex or Visa. The other thing that's happening is that we've seen a lot of retailers very recently in 2026 talk about how more and more consumers are now buying the cheaper brands. I'm talking about Walmart, Target, and Kroger have all said essentially that consumers are now looking for cheaper alternatives because things are getting more expensive. And then we have to think about how this is going to impact investments as well because it will have an impact on investments. Because number one, keeping cash is a losing proposition. Now, this doesn't mean you shouldn't save any cash. Look at Warren Buffett, one of the most successful investors of all time. He's sitting on the largest cash pile ever. But when he's sitting on a large cash pile, he's not just sitting on it to sitting on it. He's sitting on it because he wants to use that money when he finds a good investment opportunity. Now, I know Warren Buffett is retired and all that, but you get the idea that his firm has this huge cash pile not because they think that cash is going to make them wealthier in the future, but because they believe that holding onto that cash is going to give them a good buying opportunity. So, there are times and places to keep cash. Keep cash for an emergency. Keep cash to make a purchase. Keep cash to make an investment. The mistake that a lot of people make is they assume that I have this extra cash, investing is risky, I'm just going to take all my cash and put it into a high-yield savings account, and hopefully that will be enough because my high-yield savings account is paying me two and a half, three and a half percent. So, it's essentially at inflation, so I'm not losing. And it's better to put that into a high-yield savings account than not put it into a high-yield savings account. But unfortunately, you're still losing because number one, the prices of things are still rising, and in many instances, they're rising faster than the interest that you're getting from your bank. But then number two, you also have to pay taxes on that interest that you're getting. So, if you're getting 3% interest after taxes, you might only be getting 2% interest net, which is not keeping up with CPI. And this is why your financial education is so important because unfortunately, this type of financial education is never taught, but it is so important because we're taught to go to school, get a good job, earn a salary, and then save as much money as possible. Well, if your salary is not keeping up and your savings are losing value, that is a losing proposition. And in this economic system, it costs money to eat, it costs money to feed other people. You have to learn how to not just invest your money, but also preserve the value of your wealth. That way, you can actually build wealth. Because if you're just making a salary and then you're spending it, well, the cost of living is going to grow. And if your incomes are not keeping up with the cost of living, you're going to have to keep working harder and harder just to keep up with the same lifestyle that you have today. When you would like to accelerate your lifestyle, have more stuff, have more assets because you're getting older in your career. While for many people, they're getting more seasoned in their career, but their salary growth is not keeping up with inflation. And that's why becoming an investor becomes so important because what we've seen throughout history is that inflation disproportionately benefits the investor. Why? Because the way that our economy works is every time you spend a dollar, somebody else makes a dollar. The more money you spend, the richer somebody else gets. But the person that's actually getting rich is not the worker in a company, it is the investor in a company. So, if I go to Chipotle today and I buy the bowl for $10, well, it's not the workers that are making that money. The worker gets their salary, but all the dollars of profit go into the hands of the investors. When inflation happens and now I got to pay $15 for that same bowl, the workers might get a little bit of a raise, but all the extra dollars go into the hands of the investors. So, when inflation happens, that means more dollars go into the businesses which ultimately get piled up into the hands of the investors because the investors are the ones that are getting the profits. And so, if you are not that investor, you are just paying the price of inflation because that means you have to pay more money to buy stuff. Inflation makes consumption more expensive. That means you got to pay more money to buy a grocery, you got to pay more money for your rent, you got to pay more money to buy your AirPods, you got to pay more money to buy your vacations. But when the cost of living goes up, when the prices of things go up, that means the businesses are collecting more dollars. They're making more dollars in profit and the person that owns those profits are the investors. Now, there are many ways you can invest your money. You can invest your money in stocks. You can invest your money in real estate. The three asset classes that have built more wealth than anything else over the last century are starting a business, stocks, and real estate. Now, starting a business is more than just an investment. That's really now an active investment and it's very risky. It's hard. It's not for a lot of people. That's okay. But anybody can invest in stocks. Investing in real estate is more difficult, but it is a way to diversify your money outside of stocks. You can also own some gold, but gold doesn't produce value the way that stocks and real estate do because your gold just sits there and looks back at you. It doesn't have as much economic utility, but there is a value in gold because gold is there to protect your money against the devaluation of currency because gold generally goes up when people are concerned about the dollar. So, it's nice to have a little bit of that in your portfolio as a protectionary play, as an inflationary hedge play. So now, as you think about investing your money, it's not just about finding one stock. It's about building a portfolio. And by portfolio, I mean having stocks, maybe having some real estate, maybe having some gold, maybe some speculative assets. Maybe that can include crypto or startups or whatever that might be. But understanding now that the way you build wealth through this inflation, because unfortunately, this inflation is not going to go away in 2026, and all the inflation that we're going to see is going to compound on top of what we've seen in the past number of years. And if we see more government spending, if we see lower interest rates, all these things are continuing to be more inflationary. And we know that inflation hurts the average person, but it also makes the investor richer. The people that understand this can use it to their advantage. The people that don't, unfortunately, are the ones that are paying the price. That's why I want you to understand this because unfortunately, we're never taught this in school. Now, if you are an investor, want to become an investor, have a brand new free investing master class where I'll walk you through how you can get started as an investor and find hidden investment opportunities before they hit the headlines. I'll give you the exact framework that my firm and I use to research investments. And when you register, you're also going to get access to market briefs, which is my newsletter for investors, completely free. So if you want to watch the investing master class, I have the link for you down in the description below. And if you got value out of this video, the best thank you is a referral. So if you could, please share this video with a friend, family member, colleague, a fellow investor, that way we can continue to spread this type of financial education. Thank you. Gold and silver has been falling at the fastest rate we've been seeing in more than a decade and Bitcoin prices are getting hit hard. Why? Because of what President Trump just said. President Trump has been very critical of the Federal Reserve Bank. So although President Trump has been demanding lower interest rates, the Federal Reserve Bank has been saying no. President Trump just announced his new...