Inflation is a top economic concern

Inflation is millionaires’ number one economic fear for the first time in recent history, according to the CNBC Millionaire Survey.

When asked about the biggest risk to the US economy, inflationary ranked first, along with government dysfunction, according to a survey of investors with investable assets of $1 million or more. The results mark the first time that inflation has ranked as the top worry for millionaire investors and show that even the wealthiest Americans worry about bullish spiral.

“It’s a big change,” said George Walper, president of Spectrem Group, which conducted the survey with CNBC. “And their interest has grown over the past few months.”

The survey found inflation fears are creeping up the income ladder for those most able to afford higher prices, even if the specific effects are different. For most Americans, inflation affects increase in the cost of food, gas, housing and other living expenses. For the wealthy and wealthy, inflation carries the threat of higher interest rates, which increases borrowing costs and can put pressure on property values.

According to the survey, millionaires rank inflation as the second-biggest threat to their personal wealth, right after government dysfunction.

“For most Americans, the fear of inflation is rising costs,” says Walper. “For the wealthy, there’s also the fear of rising capital costs.”

Millionaires largely believe in The Federal Reserve’s Inflation Management without prices or interest rates skyrocketing out of control. According to the survey, 59% of millionaires are “confident” or “somewhat confident” about the Federal Reserve’s ability to manage rising inflation. And less than a third of millionaire investors have made changes to their portfolio or plan to make changes due to inflation.

Three-quarters of millionaires say interest rates will be higher next year, but only 7% say they will be “much higher.”

However, there is a big difference between generations of millionaires when it comes to inflation. Baby boomer millionaires, who lived through the hyperinflation of the 1970s, are four times more likely than millennials to see inflation as a threat to their wealth. They are also less likely to consider the current round of inflation “temporary” – at 27%, compared with 45% for millennials.

Walper says that wealthy millennials, who have earned or inherited their fortune over a long period of time with low interest rates, are insensitive to the true cost of higher interest rates.

“Until they apply for a 12 percent mortgage, they won’t be on the same page,” says Walper. Inflation is a top economic concern

Emma James

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