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Inflation & The Fed: Substantial Progress Is Still A Ways Off

inflation

You don’t need to have a degree in economics or be a financial analyst to know that rising inflation is not a good thing.

Now considering the fact that we are hovering around a national inflation rate of 5.4% while The Fed claims that 2% is a healthy number, it should be a daunting signal for all of us.

The Fed claims they do not plan to stop printing money any time soon, at least until the unemployment numbers recover. Some are arguing that they are causing more harm through their continuous quantitative easing and monthly bond purchases.

What the Fed is doing is watching on the sidelines as inflation reaches alarming levels.

What does this mean for us? Higher cost of goods and services, all while the value of our dollar and savings accounts erode.

Chair of the Federal Reserve, Jerome Powell, made the following comment in a recent press conference:

 “I think we’re some way away from having had substantial further progress towards the maximum employment goal. I would want to see some strong job numbers.”

The reality is that unemployment remains higher compared to levels prior to the COVID-19 pandemic. The higher the unemployment rate, the slower the economy’s recovery…

The way we understand it is we are far, far, away from achieving stable unemployment numbers, according to The Fed.

Jobs have been added in recent months, but 6.8 million fewer jobs existed last month compared to the pre-pandemic time in February 2020.

Lawmakers are calling on the Fed to halt rising consumer prices and skyrocketing housing costs by cutting off its bond purchases.

What is the Fed prepared to do if it turns out inflation isn’t transitory?

Much of the criticism comes from those saying the economy is well past the need for Fed support.

Powell, along with Treasury Secretary Janet Yellen and Biden’s economic advisers, all believe that inflation will cool off “soon.”

But his tone is hard to keep up with.

He conceded in the press conference saying that the Fed doesn’t have “much confidence, let’s say, in the timing of that or the size of the effects in the near term.”

As soon as Powell began talking and shared his plans, the price of gold started rising, eventually breaking a two-week high.

An independent analyst told Reuters:

“The gold market seems to be responding to natural indicators like the dollar and U.S. Treasury rates, which are favorable to gold’s outlook and notwithstanding the fact that there is no significant change in terms of Fed policy on tapering.”

One thing is for certain, the higher inflation rises the more your wealth loses value.

American Hartford Gold was founded for times like these. Call us today at 800-462-0071 to learn why Americans are protecting their wealth with assets like gold.

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