Recent reports reveal an unexpected surge in U.S. inflation in September, as the consumer price index (CPI) jumped 3.7% year-on-year, according to the U.S. Bureau of Labor Statistics. Although core inflation has seen a slight dip from 4.3% to 4.1%, experts are speculating about potential actions by the U.S. Federal Reserve, including hiking the federal funds rate due to the sustained inflationary trend.
Unanticipated Rise in U.S. Inflation Sends Shockwaves Through Financial Markets
The latest CPI data from the U.S. Bureau of Labor Statistics demonstrates that inflation for September has outpaced earlier estimates. The labor department's report stated: "The consumer price index for all urban consumers (CPI-U) rose 0.4 percent in September on a seasonally adjusted basis, after increasing 0.6 percent in August." The U.S. institution further clarified:
"The index for shelter contributed the most to the monthly all items increase, accounting for over half of the rise. The gasoline index also made a significant contribution to the all items monthly escalation."
All four prominent U.S. stock indices suffered on Thursday, along with the crypto market, which contracted 1.34% to settle at $1.04 trillion. Bitcoin (BTC) now oscillates below the $27K threshold, having plummeted 4.4% within a week. Gold and silver also experienced declines following the release of the U.S. Labor Department's newest inflation data. Speculation is rampant that the ongoing inflation trends may provoke the U.S. central bank to increase the benchmark interest rate.
Expert Opinions on Future Inflation Trends
However, some experts remain unconvinced. Andrew Hunter, Deputy Chief U.S. Economist at Capital Economics, shared his views, forecasting a reduction in inflation. According to Hunter, "There is no convincing evidence here that would persuade Fed officials to increase rates at the upcoming FOMC meeting. We still anticipate a quicker decline in inflation and slower economic growth, resulting in more aggressive rate cuts next year than current market predictions."
As of 10:00 a.m. Eastern Time on October 12, 2023, the CME Fedwatch Tool offered its prediction: the likelihood of a rate hike in the imminent meeting, just 20 days away, seems low. A substantial 87.4% probability suggests the Fed will maintain the status quo, while a slim 12.6% chance points toward a potential rise of 25 basis points.
Your Thoughts on the U.S. Inflation Rise
We invite you to share your views on the recent rise in U.S. inflation. Please feel free to share your thoughts and opinions on this subject below.
Frequently Asked Questions
What Does Gold Do as an Investment Option?
The supply and the demand for gold determine how much gold is worth. It is also affected by interest rates.
Gold prices are volatile due to their limited supply. Physical gold is not always in stock.
What precious metals do you have that you can invest in for your retirement?
Gold and silver are the best precious metal investments. They are both easy to trade and have been around for years. You should add them to your portfolio if you are looking to diversify.
Gold: Gold is one the oldest forms currency known to man. It's stable and safe. It's a great way to protect wealth in times of uncertainty.
Silver: Investors have always loved silver. This is a great choice for people who want to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Another form of precious metal is platinum, which is becoming more popular. It's resistant to corrosion and durable, similar to gold and silver. However, it's much more expensive than either of its counterparts.
Rhodium: The catalytic converters use Rhodium. It is also used in jewelry-making. And, it's relatively cheap compared to other types of precious metals.
Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It's also less expensive. It's a popular choice for investors who want to add precious metals into their portfolios.
Is the government allowed to take your gold
Because you have it, the government can't take it. It is yours because you worked hard for it. It belongs to you. This rule could be broken by exceptions. Your gold could be taken away if your crime was fraud against federal government. Also, if you owe taxes to the IRS, you can lose your precious metals. However, even if taxes are not paid, gold is still your property.
What is the best precious metal to invest in?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Although gold has traditionally been considered a safe investment choice, it may not be the most profitable. Gold may not be right for you if you want quick profits. Silver is a better investment if you have patience and the time to do it.
If you don't care about getting rich quickly, gold is probably the way to go. Silver may be a better option for investors who want long-term steady returns.
How much of your portfolio should be in precious metals?
To answer this question, we must first understand what precious metals are. Precious metals refer to elements with a very high value relative other commodities. This makes them extremely valuable for trading and investing. Gold is today the most popular precious metal.
There are however many other types, including silver, and platinum. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It also remains relatively unaffected by inflation and deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. That said, they do not always move in lockstep with each other. The price of gold tends to rise when the economy is not doing well, but the prices of the other precious metals tends downwards. Investors expect lower interest rate, making bonds less appealing investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. Since these are scarce, they become more expensive and decrease in value.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. Because precious metals prices are subject to fluctuations, it is best to invest across multiple precious metal types, rather than focusing on one.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
External Links
cftc.gov
finance.yahoo.com
bbb.org
law.cornell.edu
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
Tips to Invest in Gold
One of the most sought-after investment strategies is investing in gold. This is because there are many benefits if you choose to invest in gold. There are many options for investing in gold. Some people prefer to buy gold coins in physical form, while others prefer to invest in gold ETFs.
Before you purchase any type or gold, here are some things to think about.
- First, you must check whether your country allows you to own gold. If so, then you can proceed. Or, you might consider buying gold overseas.
- Secondly, you should know what kind of gold coin you want. You have options: you can choose from yellow gold, white or rose gold.
- Third, consider the cost of gold. It is best to start small and work your way up. You should diversify your portfolio when buying gold. You should invest in different assets such as stocks, bonds, real estate, mutual funds, and commodities.
- Don't forget to keep in mind that gold prices often change. It is important to stay up-to-date with the latest trends.
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By: Jamie Redman
Title: U.S. Inflation Surges Beyond Forecasts, Impacting Global Markets
Sourced From: news.bitcoin.com/us-inflation-rises-beyond-projections-markets-jittery-rate-hike-in-question/
Published Date: Thu, 12 Oct 2023 16:30:50 +0000
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