This week on The Investopedia Express podcast, we head down to ETF Exchange to learn what is coming down the tracks for investors riding the rails of exchange-traded funds (ETFs). Todd Rosenbluth of VettaFi and Reggie Browne of GTS join the show to tell us why there is still a lot of growth ahead for the ETF industry, and why they are creating new solutions for more discerning investors. Plus, a little risk-reversal takes hold after a torrid January, just as retail investors dive headlong into the options market. Be careful out there.

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Term of the Week: Deflation

This week’s term comes to us from Boris in San Francisco, who’s a Scorpio according to his Instagram profile—just like me! Boris suggests ‘deflation‘ this week, and we like that term given the critical CPI and PPI reports we will be getting this week.

According to my favorite website, deflation is a general decline in the price level of goods and services, and is usually associated with a contraction in the supply of money and credit—sound familiar? Deflation can also occur due to increases in productivity and technological improvements.

We’ve seen deflation across parts of the economy, including energy prices and lumber, but not in key areas that impact consumers the most, like food, shelter, and wages. That’s why the Fed will likely continue to stay aggressive on interest rates.

It’s also important to know the difference between deflation and disinflation. Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to a slowdown in the rate of inflation itself. We’re seeing a lot more disinflation than deflation lately, but that’s also starting to change.

Good suggestion, Boris from San Francisco who’s a Scorpio. We’re going to be sending you some Investopedia socks.

Links for Show Notes

What is an Exchange-Traded Fund (ETF)?

Exchange — An ETF Experience

Todd Rosenbluth — VettaFi

Reginald M. Browne — GTS

Deflation: Definition and Causes

Disinflation: Definition, How It Works, Example

Global Market Insights: The Costs of Rising Short-Termism

FactSet Earnings Insights: February 10, 2023

CBOE Market Statistics

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