2 Biggest Threats to the Economy: Omicron and the Fed

economic crisis

Things were looking positive for a while, almost as if we were about to be done with COVID-19 and all its chaos and leaving 2022 to be a year of recovery and growth.

That was until the week leading to Thanksgiving when we learned of a new COVID variant called Omicron.

The markets had an instant negative reaction to the news, letting us know for certain that until this was completely resolved, positive market sentiment and movement would likely remain strained.

Omicron is clearly one of the greatest threats that our economy faces. The other significant threat to our economy is one that we here at American Hartford Gold have been transparently vocal about for some time.

Similarly, the sentiment has been brought to light by notable investment banks.

The Federal Reserve is now being viewed by major financial institutions like Morgan Stanley to be a greater threat to stocks than Omicron.

On one side of the spectrum, we have a virus that continues to mutate, and on the other side of the spectrum, we have an American organization that is expected to be protecting our economy and financial state from catastrophes like the virus.

Instead, we have been dug into a financial hole for nearly two years that many consider so deep we might have gotten ourselves stuck.

Excessive government spending, stimulus checks, and ramping inflation are just a few issues that come to mind.

In a Bloomberg article, Brian Nick of Nuveen, the investment arm of TIAA, with $1.3 trillion in assets under management, stated:

“The major risk to our outlook remains a sudden tightening of financial conditions if central banks are forced to respond to inflation driven by an overly tight labor market.”

Strategists, including those at JPMorgan Chase & Co., have also stated that central banks, not COVID-19, as the main risk to their outlook for stocks.

In light of all of the new variant news, Goldman Sachs has also cut their forecasts for US GDP growth this year and next after.

No one can know for certain what the future will look like or what direction the Federal Reserve will be taking soon. Whatever your feelings are, it’s time to take control and prepare for the unexpected.

Do you have a plan in place?

Call American Hartford Gold at 800-462-0071; we can help you make one.

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