Jaspreet Singh / Jaspreet Singh
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The stock market has faced turmoil recently, and warnings are reverberating from Wall Street, pointing to concerns about a potential recession. While this is possible, another immediate issue demands attention: inflation.
Financial analyst Jaspreet Singh recently shared insights on his YouTube channel, The Minority Mindset, discussing why inflation might overshadow concerns about a recession in 2025. He emphasizes that the evidence of rising inflation is mounting and becoming increasingly troublesome for consumers and employees alike.
Recent Data Indicates Inflation Is Increasing
The reality is clear: current reports illustrate that inflation is on the rise rather than decreasing. In January, inflation surged to 3%—the highest rate seen in six months and exceeding economists’ expectations of 2.9%. Just a few months prior, in September, inflation stood at 2.4%. At that time, the Federal Reserve had hoped we were finally overcoming inflation, but that clearly hasn’t been the case, as inflation has continued to grow month after month.
The Origins of This Situation
According to Singh, the ongoing inflation crisis traces back to the $5 trillion the government borrowed from the Federal Reserve Bank in 2020 due to the unforeseen impact of the COVID-19 pandemic.
“The problem is, the Federal Reserve Bank didn’t actually have $5 trillion available. So, in order to provide this amount to the U.S. government, the Federal Reserve had to effectively create the money from nothing,” Singh remarked. “Everyone suddenly had more cash available.”
Moreover, this availability of money was free, an unrealistic scenario. There are always repercussions involved, and in this case, that consequence has manifested as inflation.
“This is where the Federal Reserve Bank has been attempting to tackle the inflation issue,” Singh stated. “However, they aren’t correcting it in the manner you might assume; they don’t want the prices of goods to decrease—that is termed deflation. Instead, they aim for prices to rise at a slower rate, known as disinflation.”
Why prioritize disinflation over deflation? Because deflation signals an impending recession. The goal of the Federal Reserve is to reduce inflation to 2%, not to let it drop to zero. Yet, prices continue to climb.
The Federal Reserve’s Current Stance
The Federal Reserve was once confident it had achieved disinflation; however, the current rising inflation trend illustrates that the issue remains unresolved. So, what’s next?
“From 2020 to 2022, a significant amount of stimulus was rolled out, involving extensive money printing and interest rate cuts, setting the stage for inflation,” Singh detailed. “Between 2022 and 2023, the focus shifted to raising interest rates in a bid to combat inflation. Currently, the Federal Reserve wants to stimulate the economy without exacerbating the inflation situation and is seeking a strategy to achieve this, particularly in light of the uncertainty brought about by Trump-era policies.”
As Singh highlighted in his late-February video, the Fed signaled it planned to “remain steady” without making significant changes, and that sentiment seems to endure.
On March 7, Federal Reserve Governor Adriana Kugler informed CNBC, “Due to the recent rise in inflation expectations and concerning inflation categories that have not progressed towards our 2% objective, it may be appropriate to maintain the policy rate at its current level for an extended period.”
Key Areas Most Affected by Inflation from February 2024 to 2025
It’s important to note that inflation doesn’t uniformly increase the prices of every consumer product. Singh emphasized that, over the past year, inflation has particularly impacted four categories: housing expenses, prescription drug costs, air travel, and dominating the list, auto insurance premiums.
Key Areas Experiencing Negative Inflation from February 2024 to 2025
Singh pointed out the four sectors that saw the most significant price decreases over the previous year: furniture, rental vehicle rates, electronics, and appliance costs.
Inflation Impacts Different Demographics Unequally
Just as not every product rises in price due to inflation, it doesn’t affect all individuals equally. In fact, the impact can be quite pronounced for some.
“Inflation disproportionately affects consumers and especially employees much more than it does asset owners,” Singh explained. “In fact, inflation tends to benefit asset owners.”
This occurs because it allows businesses to increase their revenues as consumers face higher prices for goods and services.
