USA: Why ‘Price Stability’ Is a Myth

We often hear about 'price stability' as if it’s something we can count on, but in reality, the U.S. economy doesn’t work that way. When prices rise for one thing—say, a popular vacation rental or college tuition—it might be because consumers are spending less elsewhere, not because everything is getting more expensive together. Just look at technology: as smartphones became more affordable and accessible, other limited resources like hotel rooms or event tickets grew pricier. This perspective challenges the idea that the central bank can truly control price stability, since global trends and millions of transactions shape how much we pay for goods and services. For those of us navigating major investments—like buying or selling a home—a steady dollar could encourage more investment in real estate, instead of people focusing on inflation hedges. Changing prices aren’t always a sign of trouble; sometimes, they show progress and new opportunities across the economy. That’s something I always keep in mind when helping clients make sense of the market and find the right move for their future.