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We asked 7 experts: 'What's happening with the economy?' Here's what they said.
Yahia BarakahSeptember 13, 2025 at 4:35 AM
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We asked 7 experts: 'What's happening with the economy?' Here's what they said. (Hispanolistic via Getty Images)
The economy just delivered concerning signals that could hit your wallet hard. Inflation picked up pace in August while the job market flatlined, putting the Federal Reserve in an unusual dilemma ahead of next week's meeting on September 16 and 17.
Consumer prices rose by 0.4% in August, pushing annual inflation to 2.9% — the highest since January. At the same time, employers added just 22,000 jobs, the weakest August since 2010. And unemployment now sits at 4.3%.
Making matters worse, the government just revealed it overcounted jobs by 911,000 over the past year — meaning the market was shakier than we thought.
Making sense of the economic warning signs
These reports can make for headlines that sound like economic jargon, but they directly affect how you spend and borrow money.
"Think of the consumer price index (CPI) and producer price index (PPI) as a snapshot of prices," says Chad Rixse, director of financial planning at Forefront Wealth Partners in Austin, Texas. "CPI shows how much prices for things we buy every day — like food and clothes — have gone up or down. PPI tracks the prices companies pay to make stuff. When these numbers are high, it's a signal that inflation is still kicking, and that gives the Federal Reserve something to think about."
💡 What does the Federal Reserve do? The Fed has two main jobs: keep prices stable and Americans employed. The central bank uses this data to guide major economic decisions that can impact inflation, hiring and more.
"One of the Fed's main jobs is to keep inflation in check," Rixse explains. "They use interest rates like a gas pedal and a brake for the economy. When inflation is high, they hit the brakes by raising rates. When they feel like they've got things under control and the economy needs a boost, they might take their foot off the brake and cut rates."
🛒 August's price jumps hit where it hurts -
Overall food prices increased by 0.5%
Grocery costs increased by 0.6%
Beef prices surged by 2.7%
Fruit and vegetable prices rose by 1.6%
Gas prices climbed by 1.9%
Some of these price increases are a result of new tariffs on imported goods. Jake Krimmel, senior economist at Realtor.com, explains that "the uptick in inflation may reflect the impact of new tariffs. New and used car prices moved higher, as did home furnishings, all potentially tariff-sensitive categories."
"Don't expect big relief at the grocery store anytime soon," says Ramiro Marmolejo, a certified financial planner (CFP) at Financial Rubrics, Inc. in San Antonio, Texas. "Gas prices could stay lower for now, but the cost of food and services tends to be sticky," he adds, meaning that current prices may become the new norm.
Learn more: 10 best apps to save money on food — from groceries to restaurants
3 expert-approved ways to inflation-proof your finances
Inflation chips away at your money's purchasing power, but you can slow down or even reverse this impact.
1. Audit where your money goes
Brennan Decima, CFP and owner of Decima Wealth Consulting in St. Petersburg, Florida, views this as "an opportunity to look at your budget to see where the pain points are. A good rule of thumb is to spend no more than 50% of your income on essential expenses."
2. Get your cash out of low-yield accounts
Protecting the value of your dollars requires action. Ryan Nelson, chief financial planner at Alchemy Wealth Management in Reno, Nevada, recommends "making sure your cash is not sitting idle in a low-interest account." Trade your traditional savings for high-yield accounts that can grow your money 10 times faster, compounding your balance daily or monthly.
3. Match your investments to your goals
After upgrading your emergency fund to a high-yield account, Marcel Miu, chartered financial analyst (CFA) and CFP and founder of Simplify Wealth Planning in Austin, Texas, suggests matching your investments to when you'll need the money:
Short-term needs. Treasury bills and short-term bonds, which are low-risk government and corporate loans that pay steady returns.
Long-term goals. Diversified index funds that pool money from investors to invest in hundreds or thousands of companies.
Learn more: How to automate your investing with a robo-advisor
Why the Fed might cut rates despite rising prices
Despite inflation moving in the wrong direction, most economists expect the Federal Reserve to cut interest rates next week. The weak job market appears to be its bigger concern right now.
The latest employment data shows that the number of unemployed people now exceeds the number of job openings for the first time since 2021. These concerning signs are changing the positions of Fed officials, including Governor Christopher Waller, who recently warned about the deteriorating employment situation.
"While there are signs of a weakening labor market, I worry that conditions can deteriorate further and quite rapidly," Waller said during a speech in Miami, Florida, adding that he hopes a rate cut could help keep labor market conditions from worsening.
Sources: Bureau of Labor Statistics, Board of Governors of the Federal Reserve
Your rate-change game plan: Savings, loans and debt
A Fed rate cut would quickly ripple through your financial life. Here's what the experts say to do now, before rates drop.
Lock in today's highest rates
"For those with savings right now, CDs and high-yield accounts are paying some of the best rates we've seen in years," Ramiro Marmolejo points out. "However, keep in mind that if the Fed cuts rates, banks will follow. A CD paying 4.50% APY today may look very good if those same rates fall into the 3.50% APY range later this year."
That's why locking in a CD before rates drop is one of the smartest moves savers can make right now. "If you need the money within a year, open at least a partial position now. Use 6- to 12-month CDs or no-penalty CDs. If your timeline is uncertain, split it. Half into a CD today, half in a high-yield savings account," Miu recommends.
Brennan Decima notes that for those relying on fixed income, "locking in current rates now to secure higher cash flow is a great way to protect income streams in retirement."
Learn more: The next Fed cut could hit your savings — but a CD protects you, here's how
Time your big loans for falling rates
When the Fed cuts rates, it typically means lower payments on variable-rate debt like credit cards and home equity lines of credit. But it can take some time, and relief might be modest.
Meanwhile, as everyday costs rise, debt you're carrying can hurt more because your money buys less.
This creates competing pressures in lending and mortgage markets. Jake Krimmel says the weak job market could push some rates lower, while rising inflation pushes them up. This uncertainty makes it harder to predict where borrowing costs will land in the coming months.
Krimmel adds the recent drop in mortgage rates might already reflect upcoming Fed decisions. That means even if the Fed does cut rates next week, you might not see immediate dramatic changes in mortgage rates as the market may have already "priced in" the expected rate cut.
Learn more: How the Federal Reserve affects mortgage rates
Prioritize your most expensive monthly payments
Jordan Gilberti, certified financial planner and founder of Sage Wealth Group in Tampa, Florida, explains that "deciding whether to pay down debt or focus on savings comes down to interest rates. If you're paying high interest on debt, reducing that balance can often provide a guaranteed return, while low-interest debt may allow more room for saving."
💳 High-interest debt wins every time: "If you're carrying a credit card at 20% APR, paying it off is like earning a guaranteed return far higher than any bank account," Marmolejo adds.
Even the best savings rates can't compete with being free of high-interest debt. However, financial experts typically recommend keeping at least a small emergency fund even while paying off debt, since unexpected expenses could force you back into high-interest borrowing if you have no cash reserves.
Learn more: Debt snowball vs. debt avalanche method
The takeaway: Focus on what you can control
The unusual combination of rising prices and a weak job market makes planning tricky. Gilberti recommends diversifying your savings, keeping money accessible and staying flexible if things change.
Other ways to cut through the chaos:
Stick to a spending plan that prioritizes essentials
Avoid lifestyle creep
Make small, steady moves, not dramatic changes
Keep putting money toward retirement and other long-term goals
"Inflation isn't going away quickly, but you don't need to over-react," Marmolejo cautions. "For long-term goals, consistency is key. Even $100 a month grows meaningfully over time, regardless of what the headlines say."
Learn more: How I started investing with just $100 — and why you shouldn't wait either
More stories you might like -
7 grocery staples you're wasting money on (and what to buy instead)
Shrinkflation was the start. Its sneaky twins cost you even more.
5 smart moves after you've hit $10,000 in savings
Top banking mistakes that could be costing you money
Can you really retire with $500,000 in savings and investments?
📩 Have thoughts or comments about this story — or ideas on topics you'd like us to cover? Reach out to our team.
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