Inflation has been bruising Americans for more than two years — and it's finally losing some of its punch.
The Labor Department reported Wednesday that the consumer prices in June were up just 3% from a year ago — the smallest annual increase since March 2021. What's more, forecasters say inflation could fall further in the months to come.
But two years of high inflation has left its scars, and people are adjusting their habits, potentially in permanent ways.

Here are five things to know about the state of inflation today.
Inflation has fallen sharply from its peak last year
It was a totally different picture this time last year. Back then, inflation had topped 9%, fueled in part by record-high gasoline prices following Russia's invasion of Ukraine.
Since then, gasoline prices have tumbled more than 26%. And that's having a big impact on the day-to-day lives of many Americans, especially commuters like Kate Blacker from Jersey City, N.J., who travels about an hour each day to her job at a community college.
"I'm a lot less worried now than I was six months ago, eight months ago, when the prices were rising so rapidly and I didn't know when that was going to cool down," says Blacker.
Grocery prices also leveled off last month, in a welcome relief to consumers' budgets.
And in another positive development in the midst of the summer, the price of airline tickets and hotel rooms fell in June, despite strong demand for travel.
Inflation likely has further to fall
Here's more good news: Even lower inflation rates are in the pipeline. Rent was a big driver of inflation in June, but people signing new apartment leases this summer are seeing smaller rent increases than they did a year ago.
That takes time to show up in the government's inflation tally, but the writing is on the wall.
Likewise, the wholesale price of used cars has been falling for several months, so those savings should continue to produce lower prices on dealers' lots.
Omair Sharif, who heads the forecasting firm Inflation Insights, believes the next several months will be marked by mild cost-of-living increases, much like June was.
"This is kind of the leading edge of the summer of disinflation," Sharif says.
Companies may no longer be able to pad their profits
Economist Lael Brainard says some companies added to their profit margins during the last two years of strong inflation — a trend that could soon be reversed.
Brainard served as Vice Chair of the Federal Reserve board before moving to the White House in February to direct the National Economic Council. She points to what she calls a "price-price" spiral, when companies see their costs go up, then raise their own prices even more.
"It will be important for corporations to continue to bring their markups down after having raised them to unusually elevated levels over the past two years," Brainard told the Economic Club of New York Wednesday.
Brainard says those higher markups "should unwind if consumers are more price-sensitive and firms have to compete more intensely."
Many people are becoming more careful shoppers
Two years of high inflation has left a mark on the way people spend money, and some of those changes may be lasting.
Blacker, for example, postponed a trip to Los Angeles this summer, hoping to find cheaper plane tickets in the fall. She also canceled her gym membership, and says she and her partner are more thoughtful now about their food purchases than they used to be.
"We didn't really look so much at the grocery prices before," Blacker says. "It was more like, 'Oh, let's look up a recipe and just get whatever it is that we need.'"
With restaurant prices still climbing, she's also eating out less often.
"It's something we have to be much more conscious about, in terms our budgeting for that," Blacker says.
The Federal Reserve is not ready to declare victory just yet
The data showing easing inflation on Wednesday will likely be greeted as welcome news to the country's inflation fighters, but the battle is probably not over.
The Fed has raised interest rates aggressively over the last 16 months in an effort to curb demand and bring prices under control.
Although the central bank opted to hold rates steady at its last meeting in June, forecasters expect at least one additional, quarter-point rate hike when Fed policymakers meet in two weeks.
If inflation continues to trend down, however, that may just be the last increase in this cycle.

FAFRX (bank loan) continues to do well YTD. Other good ones are GIFIX, then FFRHX. The first two funds...YTD>7%...one year>10-11%...3 year>19-21%. All 3 funds SD is about 4.2.
But that's not all, compare this to PRCPX+TUHYX and you can see that HY has a much higher volatility. You want to achieve higher performance with lower volatility.
YTD Chart(https://schrts.co/CuXmBygK)
To see the volatility use only two funds: BL=FAFRX vs HY=TUHYX. See (https://schrts.co/vsTRCtXv) For YTD from Peaks and troughs, FAFRX was down only 1.5%, but TUHYX lost over 5%

I'm so out of touch. I've been running a business for 45 years and it's actually been profitable. What an idiot.
If I had any brains at all, I would have come up with an idea, raised billions of dollars from investors, and then proceeded to lose money every year, thereby increasing the value tenfold.
More than 40% of the companies in the S&P 500 lost money in the past year. And these are just the public companies with shares sold on the stock exchange. Imagine how many private tech companies, most funded by venture capital firms, are losing money.
It's mind-boggling how they operate. My daughter-in-law worked for one of those private startup tech companies. They found their niche in the CAP Table Management software market, which basically means they'll value your business and tell you who owns what percentage.
Apparently, that's more complicated than it seems. The founders raised $1.2 billion in 2012 and it's now valued at $8.5 billion. They have over 1500 employees and have never been profitable, losing millions and millions every year for 13 years.
They certainly don't seem to care. Like most tech companies, their employee benefits are off the charts. When my daughter-in-law had her first child not long ago, she was given a six-month paid maternity leave. That's par for the course when it comes to the tech industry, but what really blew me away was when she returned to work.
"YOU GOT A 30% RAISE??!!" I remember squealing when she told me it took her by surprise. "YOU WEREN'T EVEN THERE!!"
"Yep, I was shocked," she replied. "Very nice of them."
Six months later, 15% of the employees got laid off in a cost-cutting move. Nothing made sense.
But that's the way it goes in this new startup world. These aren't the businesses I grew up watching, nor are they the businesses I run now. We take excellent care of our employees, but we also like to remain profitable. There's a balance in there somewhere.
The list of deadbeat companies is endless. Uber lost $7.2 billion in 2022, Lyft lost $1.6 billion, Peloton $1.2 billion, WeWork $1.7 billion, Rivian Automotive (Tesla imitator) $6.2 billion. But work at any of those companies and you'll probably get a raise during your maternity or paternity leave.
Enjoy it, because you're likely to get laid off at some point. No company can endure these losses forever. Between January and May of this year, over 200,000 employees in the tech sector were laid off. Perhaps companies are realizing that the objective is to be profitable.
They certainly understand that concept at Google and Facebook. Google laid off 12,000 employees in the last 12 months and Facebook laid off 21,000. Maybe that's why Google had net income of $60 billion in that period and Facebook had net income of $23 billion.
Then there's DoorDash. The food delivery service based in San Francisco lost $468 million in 2021 and a whopping $1.3 billion in 2022. It doesn't take a genius to see it's going in the wrong direction. Someone must have noticed, because DoorDash laid off 1250 employees in November of 2022 in an effort to rein in costs.
The only problem is that the severance package included paying the employees for 13 weeks after parting ways, along with a lump sum of one month's salary. I don't want to sound insensitive, but NO WONDER THEY'RE LOSING MONEY!
To make matters worse, I was absent-mindedly scanning the job postings in Sunday's San Francisco Chronicle last weekend and up pops DoorDash. The ad said they were looking for "Engineers, including but not limited to: Software, DevOps, Backend, Data. Positions include: Junior, Senior & Management Positions. Telecommuting permitted."
I wouldn't be too thrilled if I was one of the 1250 that were laid off. And it wouldn't help to see that the positions advertised would pay between $176,000 to $238,000. What is going on here?
It's all so foreign to me. Investors keep pumping in the money, unconcerned that the losses keep piling up. They keep seeing that light at the end of the tunnel, maybe years or decades ahead. They note that Apple, Google and Facebook all lost money in their early years. But Apple became profitable in two years, Google three years, and Facebook five years. DoorDash has been around for over 10 years.
In other words, if these companies keep running their business with no concern for costs, that light at the end of the tunnel, as they say, might very well be an oncoming freight train.

A special rebalancing, which is part of Nasdaq 100's methodology to maintain compliance with a U.S. Securities and Exchange Commission rule on fund diversification ...
The special rebalancing may be conducted at any time if the aggregate weight of companies, each having more than 4.5% weight in the index, tops 48%

In addition to the diversification test under section 5 of the [1940 Investment Company] Act, many investment companies also seek to satisfy the Internal Revenue Code’s (“the Code”) diversification test to qualify as a regulated investment company (“RIC”).
...Funds generally elect to be treated as RICs under section 851 of the [Internal Revenue] Code in order to take advantage of pass-through tax treatment.

100 shares more of BHB just bought.

Any particular reason? Are you averaging down? Sorry, I don’t follow this particular stock.
Personally, I’m down to just 2 stocks - both small speculative mid-cap plays. Prefer managed funds for the most part. Less risk.

I’ve been consolidating all year. More committed today to a static hands-off approach and less to f*** around with stuff. Down from 18-20 holdings a year ago to 14 today - counting the core money market. I think it was the big sell-off in 2022 that prompted me to pick up a lot of different things that were temporarily depressed and do some gambling on individual stocks. Gets crazy. (And, I’d prefer not to re-live that year.)

As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred

Hey Fred, how far out are you going with your CD selections?

Bank of America, the nation's second largest bank, has been ordered to pay more than $100 million to customers for double charging insufficient fund fees, withholding reward bonuses and opening accounts without customers' knowledge or permission. The bank is also on the hook for an additional $150 million in penalties for the same violations.
The Consumer Financial Protection Bureau announced Tuesday that an investigation found that Bank of America harmed hundreds of thousands of customers across multiple product lines over a period of several years through a series of illegal practices. As a result, Bank of America was ordered to pay over $100 million to customers and another $90 million in penalties. A separate $60 million fine has been ordered by the Office of the Comptroller of the Currency for violating laws around overdraft fees.
CFPB Director Rohit Chopra said in a news release that Bank of America's double-dipping on fees, opening accounts without customer consent and withholding rewards "are illegal and undermine customer trust," practices he said the CFPB will put an end to across the banking system.
Bank of America's "double-dipping scheme"
According to the CFPB, Bank of America utilized a "double-dipping scheme" to "harvest junk fees" from customers. It did so by charging people $35 whenever they didn't have enough funds available, but repeatedly charged customers for the same transaction, which the CFPB said generated "substantial additional revenue".
Chopra told NPR Business Correspondent David Gura, "Building a business model by double dipping on fees is simply not legal, and that's why we've sanctioned Bank of America and ordered them to pay back the customers they cheated."
The OCC said it found that the bank charged "tens of millions of dollars" in fees in resubmitted transactions, in violation of Section 5 of the Federal Trade Commission Act, which prevents financial institutions from using unfair or deceptive acts and practices.
"Overdraft programs should help, not harm, consumers," Acting Comptroller of the Currency Michael J. Hsu said in a news release. "Today's action demonstrates the OCC's commitment to protecting consumers and promoting fairness and trust in banking. We expect banks to conduct their activities in compliance with all applicable laws and standards, and when they don't, we will act accordingly."
Bank of America Senior Vice President of Media Relations Naomi R. Patton told NPR that the bank voluntarily reduced overdraft fees and eliminated "all non-sufficient fund fees" in the first half of 2022. She said the changes have resulted in a drop in revenue from these fees of over 90%. The bank also dropped the overdraft fee from $35 to $10 in May 2022.
Withholding credit card cash and point rewards
The CFPB said Bank of America targeted potential-customers by offering special cash and point rewards if they signed up for a credit card, a common signing bonus used by competing credit card companies. However, according to the CFPB, Bank of America illegally withheld those bonuses from tens of thousands of customers.
Chopra said Bank of America has been ordered to follow through on those promises.
"We know in the U.S. many people are really closely scrutinizing which credit card they sign up for based on rewards, whether it's cash, bonuses at enrollment, or airline points, or other proprietary point systems," Chopra said. "The fact that Bank of America advertised these signup bonuses and then did a bait and switch completely undermines the the fair market and consumer choice."
Bank of America employees opened accounts without consumers' knowledge
As far back as at least 2012, Bank of America employees illegally applied for and enrolled consumers for credit cards without their knowledge or permission to reach sales-based incentive goals and evaluation criteria, according to the CFPB. Employees illegally signed up customers by using or obtaining consumers' credit reports and completed applications without their permission, which resulted in unjust fees and negative impacts to customers' credit scores.
"That's essentially taking over someone's identity and exploiting it financially, and it's totally improper," Chopra told NPR. "It's totally inexcusable. So, whether it is happening to just a handful to thousands or to millions, we find this extremely serious."
Bank of America is a repeat offender
This isn't the first time the bank has been penalized for conducting illegal practices. Bank of America shelled out $727 million to the CFPB in 2014 for illegally deceiving roughly 1.4 million customers through deceptive marketing products. The bank was also ordered to pay a $20 million civil money penalty for charging 1.9 million consumers for a credit monitoring and credit reporting services they never received, according to the CFPB.
The bank was also slapped with two other penalties in 2022 totaling $235 million: a $10 million civil penalty for unlawfully processing out-of-state garnishments--removing customer funds for debts--against customer bank accounts; a $225 million fine for automatically and unlawfully freezing customer accounts with a fraud detection program during the COVID-19 pandemic.
"Bank of America is a repeat offender. Being a household name that has been punished before didn't stop it from allegedly cheating customers out of tens of millions of dollars in fees and credit card rewards and opening up accounts without their authorization," U.S. Public Interest Research Groups Consumer Campaign Director Mike Litt said in a statement Tuesday. "The Consumer Financial Protection Bureau's strong enforcement action shows why it makes a difference to have a federal agency monitoring the financial marketplace day in and day out."

As a retired and conservative investor, and as long as the Fed keeps raising interest rates, I am staying in risk-free MM's and CD's. In the future, I might be looking at bond OEF's like CBLDX, RCTIX and TSIIX, for example.
But, in the meantime, I see no urgency to invest in bond funds, and since I don't need a lot more money, I prefer to err on the side of caution.
Fred

Between 1995 and 2000, the peak of the dot-com bubble, the Nasdaq Composite stock market index rose 400%