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IN THIS ISSUE: Fed moves, record balances, and grain growth |
GOOD START
This investment offers tax-exempt income, and anyone can buy it. Here’s how. |
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THE HEADLINES
Rate fateWhat’s happening: The Federal Reserve could decide to raise rates when it meets this week.
Here’s why: Inflation has been gaining steam, according to 3 recent economic reports.
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August’s Producer Price Index, which measures how much businesses are charging for goods and services over time, ticked up higher than the month before. This could signal that the Iran conflict is raising businesses’ costs, which they’re passing onto consumers.
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August’s Consumer Price Index, which tracks the cost of goods and services, also showed increases.
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The Fed’s preferred inflation measure—the Personal Consumption Expenditures Price Index, which tracks the change in price of goods and services—has been over the target of 2% every month this year.1
The Fed often raises rates in response to climbing inflation to make borrowing money more expensive. The move could slow spending and therefore slow the increase in prices.
What it means for you: Interest-rate jumps can be a double-edged sword. They could make paying off credit cards, car loans, and mortgages pricier, and lead to potential stock market volatility. But they could also bump up saving rates, making it more lucrative to stash cash in places like money market funds and certificates of deposit (CDs).
Psst … short-term CDs and money market funds have the potential to provide higher rates of return than cash holdings. Curious about how to invest in multiple CDs at once? Check out our model CD ladders. And learn more about our low-risk
money market funds. |
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Tip the balanceWhat happened: Retirement account balances hit record highs in the second quarter, despite market ups and downs, according to Fidelity Investments’ Q2 2026 Retirement Analysis.
Here’s why: Strong savings behaviors, market gains, and effective investing plans all helped to lift balances, according to the analysis. Record employee contribution rates totaling 14.4%, which included average employer contributions of 4.8%, brought savers close to Fidelity’s recommended 15% annual savings benchmark.2 |
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What it means for you: Saving just a little more in a 401(k), 403(b), or an individual retirement account (IRA) could have ripple effects that lead to a bigger nest egg. Fill in the blanks on our interactive tool to
find out how much you could have later if you chip in just 1% more now. |
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Grain checkWhat happened: Corn and wheat prices have spiked to their highest levels since early 2023.
Here’s why: There’s a limited supply of each. Extreme summer heat and excessive rain in the US may have led to a smaller-than-expected corn harvest. Wheat’s price hike is tied to Black Sea export disruptions because of the Russia-Ukraine conflict. Those countries export more than 25% of the world’s wheat.
What it means for you: Higher prices in the grocery aisles in 2027. Corn and wheat are usually bought 3 to 6 months before they’re turned into the packaged products that make it into your cart. While you can’t stop food companies from passing on their bigger expenses to you, you can try these 5 tips to cut your grocery bills.
If you think these rising prices present an investing opportunity, learn about investing in commodities, such as food. You could use Fidelity’s fund screeners to research relevant investments. For instance, on our
exchange-traded fund (ETF) screener, you could type in words like “wheat,” “corn,” “agriculture,” and “farm” into the search bar and look into related ETFs. (Keep in mind that thematic and commodity-focused investments are generally viewed as tactical, higher-risk complements to a portfolio, rather than core diversified holdings.) |
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HOW TO
Outsmart money dysmorphiaThis sneaky “condition” could change how you make financial decisions for the worse. |
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TUNE IN
HSAs: Beyond the basicsLearn why an HSA is one of the best ways to save and pay for qualified medical expenses and invest for your future. Join us on Thursday, September 17, from 12 p.m. to 12:45 p.m. EDT. |
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QUICK Q
What’s the difference between investing and trading?Both include buying investments with the goal of making money. What’s different is how active you are in that process. Here’s a fun way to think about them.
Investing: You might compare it to watching a movie. You look over some options, choose one, then sit back and relax for the next 2 hours or so. With investing, you typically buy shares of stocks, mutual funds, or ETFs, then keep them for a long period of time (often gradually increasing contribution amounts as you go). Your goal is to see the earnings from your investments compound and potentially grow over years, or even decades. This is
why this low-key strategy has so many fans.
Trading: It’s more like scrolling through social media on your phone. You’re constantly making decisions, choosing how long to view various clips, and quickly moving on from one thing to another. With trading, you usually buy and sell shares frequently with the hope of making a quicker profit. This is trickier, since the market is unpredictable in the short term. You need to be regularly paying attention, closely monitoring, and keeping track of what the companies you’ve bought into are doing. |
