WITHkuten was cleaned up after the non-party? It will be almost 1.5 years since the central banks understood that they had to tame high inflation with high interest rates. This, among other things, helped to cool the financial markets and their parties. At the beginning of 2023, banks were failing in America, big financial houses realized that nothing good was happening both in the financial markets and in the economy. It looked like an inflated forehead. In the middle of last year, American average inflation reached those percentages, and the markets began to speculate that the American Fed would start cutting rates and they would be able to “plug” again.
Stock investments are first in the bar. While in January 2023 they were groping in front of the entrance, at the end of the first quarter of this year they were dancing outside. ir the American stock index S&P 500 reached a new historical high when it crossed the 5250 point mark. Bitcoin surpassed pre-covid highs, mainly thanks to spot ETFs. Bonds posted double-digit gains in 2023. would it be financial nirvana?
At present, it seems that it is too early to rejoice that we are out of the worst in relation to inflation. The reason for this is the inflation of the United States. In recent months, inflation there has been above analysts’ expectations. It reached a value of 3.5 percent in March, and that does not include services and the so-called core inflation (3.8 percent in March).
Don’t give a discount mortgage. Suffering inflation in the US is affecting pensions in the Czech Republic as well
18/04/2024 ▪ 5 minutes the
The labor market there is not and will not slow down. Moreover, the amount of dollar in circulation did not decrease again, but it seems that it is slowly starting to grow. The national debt is in danger of increasing. It appears again compared to the development of inflation in the 1970s and 1980s, when those inflationary waves came in the USA.
The bond market is not sure that inflation will be definitively under control. Ten-year US bond yields rose above 4.5 percent again in April, and analysts began to overestimate the speed of annual rate cuts by the US central bank. There were even rumors that the rates could go up.
What follows from this? We can’t go all out with inflation. Her dream house doesn’t have to be as dark as it has been so far. With a high probability, we have to prepare for high rates for a long time and potentially volatile market. That is, until something breaks in the economy or on the financial markets.
But there is no need to worry for those who want to protect their assets in the long term against the likely inflation, not before covid, we were used to regularly investing and diversifying. Today, I have at my disposal a wide range of not only financial instruments.
