Inflation’s affect on the TSP

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md2018
Posts: 145
Joined: Wed Sep 08, 2010 1:17 pm

Inflation’s affect on the TSP

Post by md2018 »

It’s been such a long time since inflation has been an issue, does anyone know how it will affect the different TSP’s funds?

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bamablue
Posts: 229
Joined: Tue Jul 24, 2012 11:40 am

Re: Inflation’s affect on the TSP

Post by bamablue »

I suppose the answer to your question is, "it depends". The Fed seems to feel that this is an inflationary cycle that will not cause a trigger for rate increases. The Fed looks for a sustained 2% inflation rate and has stated that they don't see any rate increases until 2023. I don't think many investors are taking that as gospel. If the current inflationary signals continue (currently we are a little north of 4%), there will likely be a negative reaction by markets.

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Tomanyiron
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Joined: Mon Apr 26, 2010 6:39 am

Re: Inflation’s affect on the TSP

Post by Tomanyiron »

G fund daily returns (7 days a week) should increase.

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bloobs
Posts: 1083
Joined: Tue May 21, 2019 8:00 pm

Re: Inflation’s affect on the TSP

Post by bloobs »

Tomanyiron wrote: Thu May 13, 2021 4:39 am G fund daily returns (7 days a week) should increase.
Yup. I remember a time earlier this century when my local bank's checking account was returning 7% APR. If hyperinflation happens in a decade or so, it could be as high as 15-20% like between 1979-82.

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bamablue
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Joined: Tue Jul 24, 2012 11:40 am

Re: Inflation’s affect on the TSP

Post by bamablue »

bloobs wrote: Thu May 13, 2021 7:10 am
Tomanyiron wrote: Thu May 13, 2021 4:39 am G fund daily returns (7 days a week) should increase.
Yup. I remember a time earlier this century when my local bank's checking account was returning 7% APR. If hyperinflation happens in a decade or so, it could be as high as 15-20% like between 1979-82.
I remember getting my first car loan in 1982 that I though was a steal at 14%. My savings account was getting 10% interest. You could easily get double-digit Certificates of Deposit (CDs)... Inflation is a time when you want to have a stash of cash...

md2018
Posts: 145
Joined: Wed Sep 08, 2010 1:17 pm

Re: Inflation’s affect on the TSP

Post by md2018 »

Well I’m retired, no home or auto loans. A safe return of 4-5% in the G fund could actually be comforting. However what will groceries and utilities cost?

What about the F fund during higher inflationary periods?

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Fund Prices2021-06-18

FundPriceDayYTD
G $16.61 0.00% 0.60%
F $20.88 0.32% -1.49%
C $62.45 -1.31% 11.69%
S $82.88 -1.28% 11.70%
I $38.60 -1.78% 9.07%
L2065 $13.75 -1.45% 10.74%
L2060 $13.75 -1.45% 10.74%
L2055 $13.75 -1.45% 10.74%
L2050 $28.08 -1.17% 8.79%
L2045 $12.83 -1.10% 8.27%
L2040 $46.86 -1.03% 7.76%
L2035 $12.40 -0.94% 7.17%
L2030 $41.33 -0.86% 6.58%
L2025 $11.75 -0.66% 5.27%
Linc $22.90 -0.31% 2.77%

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