Real Vision: Finance & Investing #994 - Does Inflation Matter to the Fed? | with Cem Karsan
Mar 14, 2024
Discussing the implications of recent inflation data on interest rates, options market positioning, and potential market weakness. Analyzing the Federal Reserve's response to inflation, the role of gold and Bitcoin in uncertain times, and the challenges faced in navigating economic uncertainties. Exploring investment strategies for diversification, market trends analysis, and hedging strategies for potential market movements.
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Fed Ignoring Inflation Risks
- The Fed is ignoring persistent hot inflation despite strong numbers since December.
- This approach leads to a steepening yield curve, unusual with expected rate cuts, signaling loss of control over long-term rates.
Populist Elections Boost Markets
- Populist election years tend to lead to double-digit positive market returns despite underlying economic difficulties.
- These elections trigger increased spending and liquidity, inflating markets temporarily.
Gold and Bitcoin as Safe Havens
- Gold remains high due to its role as a currency and safety hedge amid inflation and populism.
- Bitcoin also performs well as a safe harbor outside developed economies, reflecting millennial confidence.