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erienewsnow.com 10 Jan, 2022 12:30 am

Why inflation can actually be good for everyday Americans and bad for rich people - Erie News Now

Why inflation can actually be good for everyday Americans and bad for rich people - Erie News Now
By Allison Morrow, CNN Business

But on the whole, inflation can actually be a good thing for many working-class Americans — especially those with fixed-rate debt like a 30-year mortgage."If you're borrowing at a fixed rate, like a 30-year mortgage, then you're a winner as inflation goes up," says Smetters."We often think of a 30-year mortgage as an inflation hedge.The same inflation benefit applies to anyone paying off federal student loans, which also have a fixed interest rate.

And many of the people taking a bath when prices rise are higher-net-worth people who hold the vast majority of government bonds.Another group getting hit are people with exposure to government bonds — think households with more than $1 million who typically invest in both equities and debt.

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