US dollar loses 23% purchasing power since 2020

The post states that the US Dollar’s purchasing power declined 23% since 2020. It concludes that an asset portfolio up 30% over the same period roughly preserves real value after inflation. It notes inflation has remained above the Federal Reserve’s 2% target for 60 consecutive months and asserts that bond markets reflect this persistent inflation.

Key figures

• Purchasing power change since 2020: -23%
• Nominal asset gain needed to break even in real terms: about +30%
• Inflation relative to Fed target: above 2% for 60 consecutive months

Implications

• Real returns: Nominal gains must be adjusted for cumulative inflation to assess true purchasing power.
• Monetary policy: Persistent inflation above target suggests ongoing policy constraints and uncertainty.
• Fixed income: Bond market pricing reflects expectations of elevated inflation and its impact on yields.