Inflation and interest rates: Help clients navigate this terrain
Inflation is persisting, interest rates are still high and economic uncertainty is all around. Consumers need their advisors to help them navigate this terrain.
“If you lower interest rates when you shouldn’t, you will end up back in the lap of inflation,” said Gary Zimmerman, CEO of MaxMyInterest, a cash management platform, in a recent webinar.
Interest rates and inflation go hand in hand, he said, with high interest rates tied to record-high inflation in the wake of the COVID-19 pandemic stimulus spending.
“The pace of inflation is moderating,” he said. “But inflation is a rate and not a level. The level of prices has not come down. You need deflation for prices to come down, and that won’t happen. Things will seem more expensive to your clients forever.”
'Economy in 'a Goldilocks scenerio'
The economy currently is in “a Goldilocks scenario,” – or just right – Zimmerman said. “Inflation is slightly above target and unemployment is slightly below target.”
However, he warned there is a risk of recession that could come from job cuts and tariffs. “The Fed is in a wait-and-see place now,” he said.
Zimmerman said stagflation is his biggest economic concern. There is a risk that tariffs will push up prices while reducing consumer demand.
How advisors can help
“Humans are fundamentally bad at understanding three things and advisors are skilled in understanding these things,” he said. Those three are:
- Orders of magnitude. Humans are unable to understand wealth inequality because they recognize how much money their neighbors earn but find it difficult to recognize someone who earns 100 times what they do.
- Real versus nominal. Keeping pace with inflation is critical to any financial plan.
- Compounding. Because of compounding, it’s important for someone to begin saving for retirement in their 20s.
What can clients do?
What should clients do? Michael Halloran, MaxMyInterest head of partnerships and business development, gave some suggestions on what clients can do to negotiate these economic waters.
- Maximize returns on cash.
- Pay off any high-interest debt.
- Ensure they have an emergency fund.
- Live below their means and look for ways to increase their incomd.
- Avoid any new debt if possible.
© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.
Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.



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