Series 79: Inflation Risk

Inflation Risk

Inflation erodes purchasing power: a dollar today can buy more than a dollar in the future as the price of goods and services rises. Inflation risk, also called purchasing power risk, is the risk that investment returns will be worth less than expected in the future because of diminishing purchasing power. The most commonly referenced measure of inflation is the Consumer Price Index, which measures the price of a “basket” of goods and services purchased by the average consumer. Inflation risk