Inflation Rate: What You Need to Know About Rising Prices

June 30, 20236 min read
Inflation Rate: What You Need to Know About Rising Prices
Share on facebookShare on TwitterShare on Linkedin

Key Takeaways

  • It is essentially the rate at which the price of goods and services rises.
  • Inflation can ensue if the nation’s money supply grows at a faster clip than the economy’s ability to turn out goods and services.
  • A frequently utilized metric for measuring inflation is the consumer price index (CPI), which is calculated by the U.S. Bureau of Labor Statistics.

The last year has seen record inflationary highs, forcing consumers to adjust to meet their obligations. Such economic conditions – the rate increased 3% in June, although outlooks are improving — also affect investors, in that inflation indicates how much of a return investments must make to maintain a certain standard. 

Still, many investors are unsure how to manage their portfolios during inflationary periods. So, here is, inflation rate: what investors need to know about rising prices.

What is “Inflation Rate?”

While the term has headlined many news stories, what exactly is “inflation rate”? It is essentially the rate at which the price of goods and services rises. When inflation occurs, the buying power of money – money’s value — drops over time.  

What is the Cause of Inflation?

While many people know first-hand that inflation causes prices to increase, they do not know what causes it. The most recent inflationary period was sparked, at least in part, by pent-up consumer demand, supply-chain problems, and stimulus from the COVID-19 pandemic.

Inflation can also be driven by heightened production costs. What is called cost-push inflation occurs when prices related to production processes such as wages or raw materials go up. 

Moreover, inflation can ensue if the nation’s money supply grows at a faster clip than the economy’s ability to turn out goods and services.

How Can We Measure Inflation?

There are metrics that help explain the inflation back story, including the personal consumption expenditures (PCE) price index. The U.S. Bureau of Economic Analysis calculates the PCE, which prices certain goods and services and compares them to previous periods.

Then there is the producer price index, which evaluates the average change over time in prices received by domestic producers for their output.

A frequently utilized metric for measuring inflation is the consumer price index (CPI), which is calculated by the U.S. Bureau of Labor Statistics. The CPI is measured by monitoring the average price change paid for disparate goods and services in these classifications: housing, food, clothing, recreation, medical care, transportation, communication, and education. 

Factors that Influence Inflation Rates

There are various factors that influence inflationary rates, including:

  1. Monetary and fiscal policy. Because it also affects aggregate demand, fiscal policy can support monetary policy in handling inflation. To combat inflation, monetary policy can lessen demand and re-anchor future inflation expectations. While such effects can be undermined by expansionary fiscal policy, contractionary fiscal policy can undergird them.
  2. Supply and demand dynamics. Drops in aggregate supply are commonly precipitated by production cost hikes. If aggregate supply decreases but aggregate demand stays the same, prices and inflation are subject to upward pressure. 
  3. International trades. When a major portion of a nation’s trade is dominated in foreign  currencies, the inflation rate is more formidably affected by exchange-rate fluctuations.

The Impact of Inflation: Winners and Losers

Inflation’s effects are far reaching, both positively and negatively.

Consumers. In addition to higher prices that can overextend budgets, consumers also face other inflation fallout. During fast-rising inflation, for example, interest rates hardly ever keep pace, causing consumer savings to gradually lose purchasing power. Retirees with fixed incomes are also hurt by inflation, as are investors in longer-term bonds as well as homeowners with variable-rate mortgages.

Note, though, that borrowers do generally benefit from unexpected inflation since the     money they repay is worth less than the money borrowed. Fixed-rate mortgage holders also benefit in that mortgage interest rates are locked in for the loan’s life, meaning they will not fluctuate with inflation. Then there are property owners, who are not subject to increasing rental costs during inflationary periods.

Businesses. In addition to consumers, businesses during inflationary periods are also hit by loftier borrowing costs, as the Federal Reserve raises interest rates. Increased borrowing costs render it more expensive to finance new businesses (as well as homes), both of which are essential for a thriving economy. In general, when inflation rates rise, just about every aspect of business becomes more expensive, and businesses may be hesitant to expand.

Overall economy. Because investors and consumers are, to some degree, deleteriously affected by inflation, the economy can suffer dire consequences. Because the money that consumers have cannot purchase as much as it once did, individuals might curb their spending – particularly if they do not get a pay hike to offset higher prices. This could hurt demand, which consequently threatens business profitability and demand. 

Should You Invest During Times of Rising Inflation Rates?

As part of a diversified portfolio, it may be a smart move to keep a portion of capital in long-term investments during inflationary periods. This permits investors to grow their money gradually over time and keep pace with rates of inflation.

While no investment is risk-free, alternative assets – those not directly correlated with stocks and bonds – are generally less volatile, even in times of economic instability. Such asset classes, which include art and real estate, can help with diversification, the practice of spreading assets around to limit exposure to any single type of asset. Diversification is key to successful investing in general, and even more so during periods of inflation.

Alternative investments can be a good way to help accomplish this. Traditional portfolio asset allocation envisages a 60% public stock and 40% fixed income allocation. However, a more balanced 60/20/20 or 50/30/20 split, incorporating alternative assets, may make a portfolio less sensitive to public market short-term swings. 

Real estate, private equity, venture capital, digital assets, precious metals and collectibles are among the asset classes deemed “alternative investments.” Broadly speaking, such investments tend to be less connected to public equity, and thus offer potential for diversification. Of course, like traditional investments, it is important to remember that alternatives also entail a degree of risk. 

Rise above Volatility

Diversify beyond the stock market with Yieldstreet.

In some cases, this risk can be greater than that of traditional investments.

This is why these asset classes were traditionally accessible only to an exclusive base of wealthy individuals and institutional investors buying in at very high minimums — often between $500,000 and $1 million.  These people were considered to be more capable of weathering losses of that magnitude, should the investments underperform.

However, Yieldstreet has opened a number of carefully curated alternative investment strategies to all investors. While the risk is still there, the company offers help in capitalizing on areas such as real estate, legal finance, art finance and structured notes — as well as a wide range of other unique alternative investments. 

Learn more about the ways Yieldstreet can help diversify and grow portfolios.


During periods of upward-trending prices, investors generally seek returns that are at least the same rate as inflation. To help safeguard portfolios, however, it is crucial that investors diversify their holdings. Adding alternatives could provide extra protection, since such asset classes generally, and inherently, guard against inflation.

We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

9 Statistics as of the most recent month end.

300 Park Avenue 15th Floor, New York, NY 10022


No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice, except for specific investment advice that may be provided by YieldStreet Management, LLC pursuant to a written advisory agreement between such entity and the recipient. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and are willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

YieldStreet Inc. is the direct owner of Yieldstreet Management, LLC, which is an SEC-registered investment adviser that manages the Yieldstreet funds and provides investment advice to the Yieldstreet funds, and in certain cases, to retail investors. RealCadre LLC is also indirectly owned by Yieldstreet Inc. RealCadre LLC is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Information on all FINRA registered broker-dealers can be found on FINRA’s BrokerCheck. Despite its affiliation with Yieldstreet Management, LLC, RealCadre LLC has no role in the investment advisory services received by YieldStreet clients or the management or distribution of the Yieldstreet funds or other securities offered on our through Yieldstreet and its personnel. RealCadre LLC does not solicit, sell, recommend, or place interests in the Yieldstreet funds.

Yieldstreet is not a bank. Certain services are offered through Synapse Financial Technologies, Inc. and its affiliates (collectively, “Synapse”) as well as certain third-party financial services partners. Synapse is not a bank and is not affiliated with Yieldstreet. Bank accounts are established by Evolve Bank & Trust. Brokerage accounts and cash management programs are provided through Synapse Brokerage LLC (“Synapse Brokerage”), an SEC-registered broker-dealer and member of FINRA and SIPC. Additional information about Synapse Brokerage can be found on FINRA’s BrokerCheck. By participating in a Synapse cash management program, you acknowledge receipt of and accept Synapse’s Terms of Service, Privacy Policy, and the applicable disclosures and agreements available in Synapse’s Disclosure Library.

Investment advisory services are only provided to clients of YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission, pursuant to a written advisory agreement.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure