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3 savings moves to make before the next inflation report
Inflation has run hot thus far in 2024. Although January’s 3.1% inflation rate was lower than December’s 3.4% rate, it was higher than economists expected. And, in February and March, price growth started to speed up across the United States – with inflation rates in those months coming in at 3.2% and 3.5%, respectively.
But, that may be good news for savvy savers. After all, inflation and interest rates usually increase at the same time. So, interest rates, and in turn, earnings on many deposit accounts, are high at the moment. And, if inflation continues ticking up, the Federal Reserve could push its federal funds rate higher – which could drive consumer interest rates up. Then again, if inflation begins to cool, the Fed could cut rates. That could lead to lower earnings on deposit accounts ahead.
With this uncertainty in the air, you may be at a loss for what you should do with your savings ahead of the coming inflation report. Find a few smart savings moves you should make ahead of the release of April’s inflation data below.
Compare today’s leading high-yield savings accounts now!
3 savings moves to make before the next inflation report
Here are three smart savings moves you should make before the next inflation report is released on May 15.
Open a CD
A certificate of deposit (CD) gives you the ability to lock in today’s high returns for the entire life of the account. “CDs are a good option if you have a chunk of money that you won’t need access to right away,” explains Brian Kelly, senior vice president and retail market manager at Rockland Trust Bank. “They generate a fixed interest rate that is typically higher than a traditional savings account.”
That’s important with inflation uncertainty in the air. After all, if April’s inflation data shows cooling from March’s high inflation rate, it could be a signal that the Fed may cut its target federal funds rate ahead. As such, financial institutions may start to reduce their CD and savings account APYs in anticipation of a potential Fed rate cut.
But, if you open your CD before the next inflation report, you can rest assured that, regardless of the state of inflation, you’ll earn a meaningful return on your money for the entire term of the account.
Compare today’s leading CD accounts now.
Open a high-yield savings account
High-yield savings accounts come with variable interest rates that may change as the federal funds rate rises and falls. But that offers you an opportunity to hedge your CD bets ahead of the next inflation report.
After all, if that report shows continued growth in inflation, it could be a signal that the Fed may increase interest rates ahead. If your savings is tied up in a CD, you won’t be able to take advantage of those potentially higher returns.
So, it may be wise to open a high-yield savings account and spread your savings between it and a CD. In doing so, your fixed rate CD will protect your earnings on your savings if inflation cools and rates fall while your high-yield savings account can produce earnings growth if inflation continues to come in hot and rates rise.
Transfer money out of accounts that earn nothing
No matter whether you open a CD, a high-yield savings account or both, it’s important that you take advantage of today’s high interest rates as prices continue to rise. Many of today’s traditional savings accounts fail to keep up with inflation (only earning an average 0.46% per year). Leaving your money in these accounts will lead to a loss of buying power as prices grow at a faster rate than your savings.
But, it’s easy to avoid that scenario. Pull your money out of any account you have that’s earning nothing, or little to nothing. Then, deposit that money into a CD or high-yield savings account with a return that outpaces inflation to grow the power of your savings rather than lose it.
Open a high-yield savings account today to earn a meaningful return on your savings.
The bottom line
In today’s inflationary environment, it’s important to make wise savings decisions. After all, leaving money in accounts that produce little-to-no earnings will only result in your money being less effective. Moreover, with the inflation report just around the corner, now may be the time to act.
Consider spreading your savings across a CD and high-yield savings account today. In doing so, you’ll lock in today’s high rates with a portion of your money while making it possible to take advantage of higher rates in the future on the rest of it (should those higher rates materialize). In either case, spreading your funds across leading CDs and high-yield savings accounts could mean that your savings produces an inflation-adjusted return rather than a loss.
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A study to devise nutritional guidance just for you
It’s been said the best meals come from the heart, not from a recipe book. But at this USDA kitchen, there’s no pinch of this, dash of that, no dollops or smidgens of anything. Here, nutritionists in white coats painstakingly measure every single ingredient, down to the tenth of a gram.
Sheryn Stover is expected to eat every crumb of her pizza; any tiny morsels she does miss go back to the kitchen, where they’re scrutinized like evidence of some dietary crime.
Stover (or participant #8180, as she’s known) is one of some 10,000 volunteers enrolled in a $170 million nutrition study run by the National Institutes of Health. “At 78, not many people get to do studies that are going to affect a great amount of people, and I thought this was a great opportunity to do that,” she said.
It’s called the Nutrition for Precision Health Study. “When I tell people about the study, the reaction usually is, ‘Oh, that’s so cool, can I do it?'” said coordinator Holly Nicastro.
She explained just what “precise” precisely means: “Precision nutrition means tailoring nutrition or dietary guidance to the individual.”
The government has long offered guidelines to help us eat better. In the 1940s we had the “Basic 7.” In the ’50s, the “Basic 4.” We’ve had the “Food Wheel,” the “Food Pyramid,” and currently, “My Plate.”
They’re all well-intentioned, except they’re all based on averages – what works best for most people, most of the time. But according to Nicastro, there is no one best way to eat. “We know from virtually every nutrition study ever conducted, we have inner individual variability,” she said. “That means we have some people that are going to respond, and some people that aren’t. There’s no one-size-fits-all.”
The study’s participants, like Stover, are all being drawn from another NIH study program called All Of Us, a massive undertaking to create a database of at least a million people who are volunteering everything from their electronic health records to their DNA. It was from that All of Us research that Stover discovered she has the gene that makes some foods taste bitter, which could explain why she ate more of one kind of food than another.
Professor Sai Das, who oversees the study at Tufts University, says the goal of precision nutrition is to drill down even deeper into those individual differences. “We’re moving away from just saying everybody go do this, to being able to say, ‘Okay, if you have X, Y and Z characteristics, then you’re more likely to respond to a diet, and somebody else that has A, B and C characteristics will be responding to the diet differently,'” Das said.
It’s a big commitment for Stover, who is one of 150 people being paid to live at a handful of test sites around the country for six weeks – two weeks at a time. It’s so precise she can’t even go for a walk without a dietary chaperone. “Well, you could stop and buy candy … God forbid, you can’t do that!” she laughed.
While she’s here, everything from her resting metabolic rate, her body fat percentage, her bone mineral content, even the microbes in her gut (digested by a machine that essentially is a smart toilet paper reading device) are being analyzed for how hers may differ from someone else’s.
Nicastro said, “We really think that what’s going on in your poop is going to tell us a lot of information about your health and how you respond to food.”
Stover says she doesn’t mind, except for the odd sounds the machine makes. While she is a live-in participant, thousands of others are participating from their homes, where electronic wearables track all kinds of health data, including special glasses that record everything they eat, activated when someone starts chewing. Artificial intelligence can then be used to determine not only which foods the person is eating, but how many calories are consumed.
This study is expected to be wrapped up by 2027, and because of it, we may indeed know not only to eat more fruits and vegetables, but what combination of foods is really best for us. The question that even Holly Nicastro can’t answer is, will we listen? “You can lead a horse to water; you can’t make them drink,” she said. “We can tailor the interventions all day. But one hypothesis I have is that if the guidance is tailored to the individual, it’s going to make that individual more likely to follow it, because this is for me, this was designed for me.”
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Story produced by Mark Hudspeth. Editor: Ed Givnish.
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