🌟 Editor's Note
Welcome to another issue of Financial Freedom Insights. This newsletter is full of financial tips, insights, financial news, announcements, a bonus for making it to the bottom, and more!
🤖 AI Note
NONE of this newsletter was generated using AI. It was written by humans for humans.
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💸 Your 10 Second Financial Freedom Tip of the Week
Went into debt for the holiday season? Take how much you spent last year, divide it by 12, and start putting that amount into a High Yield Savings Account each month. By the end of this year you will have enough money set aside to cover your expenses for the Holiday 2026 Season!
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📰 In the News
Credit Card stocks take a sharp dive
Credit Card stocks take a sharp dive as President Trump discusses capping fees at 10% - article here
Tired of high Mortgage rates?
President Trump wants Fannie Mae and Freddie Mac to buy more bonds to try and lower rates - article here
Solar Panel leases can make it hard to sell your home
As always, owning is better than renting. Read this story about how Solar Panel leases are turning into headaches for home owners - article here
📈 Financial Freedom Insight
Why Does Wall Street Care So Much About Inflation? And What Does a Rising or Falling Inflationary Trend Mean for Your Personal Finances
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Financial Freedom Insight: Table of Contents
Slowing Inflation Accelerates Markets
Inflation and Interest Rates Move in Tandem
How the Fed Manipulates Interest Rates
Personal Finance Tips for When Inflation Is Rising
Personal Finance Tips for When Inflation Is Slowing
“Stock market rallies toward record highs after better-than-expected inflation data”[1]
This was a recent headline from CBS News. The headline implies a direct correlation between Wall Street and the inflation rate, but what is that relationship exactly? Why does news of slowing inflation create such a kafuffle among Wall Street traders?
The relationship between inflation and Wall Street is a complex one, but it’s all to do with interest rates, which are controlled by The Fed.
There’s a lot to unpack here. So, read on to understand the dynamics at work. Most importantly, we explore how all of this affects you. We offer some tips on how to manage your personal finances when inflation is rising or (in the best of all worlds) falling.
Slowing Inflation Accelerates Markets
The CBS headline quoted above highlighted the excitement of Wall Street investors in early August 2025. News that the inflation rate (measured by the price of groceries, gasoline and other household items) had slowed, buoyed hopes that the board of the Federal Reserve would vote to lower interest rates in its September meetings.
The inflation rate was 2.7% in July, the same as in June, and it was below the 2.8% that economists expected, which was good economic news.
Inflation is defined as a sustained increase in prices. When the price of eggs and bread and houses keeps going up, that’s inflation. Inflation means that your purchasing power decreases — that $20 in your wallet buys you less.
Inflation and Interest Rates Move in Tandem
High inflation creates problems in the economy. When inflation rises, interest rates tend to do the same, and borrowing becomes more expensive. That means that consumers and businesses buy less and invest less. They become more conservative with their spending, slowing down the economy.
What causes inflation? Inflation occurs because there is an increase in the supply of money. With more money circulating, the demand for goods goes up because there is more money going after fewer goods.
The supply of money circulating may increase for several reasons. The central bank might print more money, there could be an inflow of money from abroad, or the government might pump money into sectors like infrastructure, for example.
How the Fed Manipulates Interest Rates to Combat Inflation
Governments usually like inflation to remain at 2%. If inflation goes above 2%, the Fed might decide to increase interest rates. This will mean that consumers and businesses have to pay more to borrow. As a result, they will rein in spending, which slows the economy.
Wall Street does not like this news because companies will tend to slow down any investment they plan to do. Companies, like people, have to pay more to borrow money to expand their operations or to invest in R&D. Consequently, company earnings calls will be less optimistic, and stock prices may go down.
If interest rates go up, it’s time for you to shop for a higher yield savings account. Banks will start to compete for your money, and there will be better deals to be had.
Should you take out a loan when interest rates go up? No. Now is not the time to buy a fancy car or a new home. Avoid new debt. Wait until interest rates come back down or you will pay a high cost for a mortgage or any type of loan.
The Fed can also decrease interest rates to stimulate spending. Now, it costs less for consumers and businesses to borrow money.
Wall Street likes this news because it means that companies may borrow money and invest in their operations. This will likely increase productivity, boost projected earnings, and raise the share price.
If you are looking to buy a car or a new home, this is the time to look for the best loan rates.
Now we understand the dynamics between inflation rates, Wall Street, and interest rates, how does all of this affect your personal finances?
Personal Finance Tips for When Inflation Is Rising
Remember that when inflation and interest rates are positively correlated. So, when one goes up, so does the other. Thus, when interest rates are rising, this is the time to spend less. Don’t take out loans. Look for ways to conserve and stick to your budget.
If you have money to invest in stocks, companies will be less inclined to follow aggressive investing strategies when interest rates are high. Stock prices are likely to go down because of the resulting lower expected earnings. It will depend on the sector and the stock, but generally speaking, the stock markets may go down.
If stock prices drop this might be the time to buy stock that you think will grow. Just remember that trying to time the market is not advisable, and choosing a long-term dollar cost averaging strategy is best for long-term investing.
When inflation is rising:
Look for the best savings accounts for your cash. Banks and credit unions will likely be offering better interest rates.
Consider using CDs and share certificates.
Watch your budget and cut down on nonessentials, like eating out, streaming services, unused gym memberships.
Focus on paying down variable rate loans. The rates on these types of loans could skyrocket. Your payment might only pay interest and not pay down any of the principal.
If you invest in stocks, now might be the time to buy.
Avoid taking out a loan until rates go down.
Personal Finance Tips for When Inflation Is Slowing
When inflation is slowing, you can expect the Fed to lower interest rates. When interest rates are low, this is a great time to buy a home and shop for a fixed rate mortgage. If you need to consolidate debt, it might be good time to take out a personal loan so that you can pay off high interest credit card debt.
When inflation is slowing:
Move cash that you don’t need from regular savings accounts to high-yield savings accounts
If rates are low, now is the time to shop for a fixed-rate mortgage
If you need to consolidate credit card debt, consider taking out a personal loan with a lower interest rate and paying off your credit card debt.
Avoid buying stocks that may be overpriced. Stock prices tend to go up when Wall Street anticipates lower interest rates. Follow a long-term investment strategy.
With a better understanding of how inflation and interest rates can influence you and Wall Street, you can better plan your personal finances. You can make better decisions, such as when you take out loans and where you place your savings.
Always consult a financial advisor to make sure you are taking the steps that are best for your situation.
Sources
[1] Yuri Kageyama and Matt Ott, August 12, 2025. “Stock market rallies toward record highs after better-than-expected inflation data.” CBS News. https://www.cbsnews.com/news/stocks-up-inflation-data-hopes-of-fed-cuts-8-12-2025/
🏆 Financial Win of the Week
Had a Financial win since our last newsletter that you would like to share with the community? Hit reply or send an email to [email protected] to let us know!
Your Story’s of success, no matter how small they may seem, can be enough encouragement to someone else to help them on their journey! We are all in this together.
📙 Nathan Haas’s Scripture of the Week
Proverbs 22:7 (ESV)
“The rich rules over the poor, and the borrower is the slave to the lender.”
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Haas Trade Financial Freedom Insights
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😺 Making it to the Bottom Bonus
P.S.S. Okay now its the end of the newsletter, for making it this far your reward is this Gif of a DJ Pizza cat spinning some sick meats (get it? because the saying is normally spinning some sick BEATS not meats….. ok I’ll stop now). Have a good two-weeks!
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