London, England – November 3, 2026 – A sum of $100 held as cash in September 2025 needed $103.74 in September 2026 to buy the same goods and services, the CPI Inflation Calculator of the Bureau of Labor Statistics shows.
Consumer prices rose 3.7 per cent in the 12 months to September, the Bureau reported on 14 October 2026. The rise in the 12 months to August had been 3.4 per cent.
The Prehn Institute, an independent research institution founded by Felix Nikolas Prehn, economist and former investment banker, today sets those figures beside its paper “The Hidden Regressive Tax”. The paper, a preprint posted on Zenodo, measures which US households keep their wealth in cash and deposits. It also measures which own the shares and property whose prices rose faster than consumer prices between 2000 and 2026.
Key figures
Consumer prices, all items: up 3.7 per cent in the 12 months to September 2026, before seasonal adjustment.
Purchasing power: $100 in September 2025 had the same buying power as $103.74 in September 2026.
Prices since 2000, from the paper: between January 2000 and June 2026 consumer prices rose 96 per cent, national house prices 237 per cent and the S&P 500 438 per cent.
Deposits, second quarter of 2026: 5.5 per cent of the national total sat with the bottom half of US households.
Ownership of corporate shares and mutual funds in the same quarter: 0.6 per cent for the bottom half.
Make-up of assets: deposits were 8 per cent of the bottom half’s own assets, and housing and durable goods 68 per cent. For the top 1 per cent, deposits were 5 per cent of assets and shares 53 per cent.
Cash and deposits in the paper
The paper by Felix Nikolas Prehn states: “Anyone who holds a dollar while the price level rises pays a levy equal to the rise.” In the paper’s account, how heavily that levy weighs depends on how much of a household’s position is money.
According to the paper, cash and deposits are one of the few kinds of liquid holding the bottom half has. Most of the rest is a home or consumer durables such as cars and appliances, which lose value with use or carry a mortgage.
Households with shares and property pay the same levy on their cash, the paper states, but receive a gain on their holdings many times larger. Households without assets receive no offsetting gain.
The index and households with few assets
The paper treats the consumer price index as a gauge of spending on goods and services. House prices reach it only through rents and owners’ equivalent rent, and its weights follow the spending of all households taken together.
Food, energy and rent take a bigger part of lower-income budgets, the paper states. On that basis it reads the headline rate as the least of the burden carried by households with few assets.
Method
The 12-month change is the all items Consumer Price Index for All Urban Consumers before seasonal adjustment, from the Bureau of Labor Statistics release of 14 October 2026. The purchasing-power comparison is taken from the Bureau’s CPI Inflation Calculator, which works from the monthly index values.
Ownership and asset make-up figures are from the Federal Reserve’s Distributional Financial Accounts for the second quarter of 2026, as tabulated in the paper. The accounts divide US households into four groups by wealth and report each group, not individual households. The paper describes its table of the levy by wealth group as a stylised account.
About Felix Nikolas Prehn
Felix Nikolas Prehn, also known as Nikolas Prehn, is an economist and former investment banker, born in Germany. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. He is also a painter and sculptor and a public advocate for animal rescue.
About The Prehn Institute
The Prehn Institute is an independent research institution founded by Felix Nikolas Prehn. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. It publishes research on the financial markets and provides instruction in professional market practice.
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