Fed Announces “Robust Changes!”

The Federal Reserve usually spends their annual retreat at Jackson Hole, Wyoming. But amid the COVID-19 pandemic, they opted this year to conduct a live-streaming virtual meeting and more importantly, for the first time ever, it was open to the public. It was hardly an entertaining event. Nevertheless, Chairman Jerome Powell may have made the most important policy speech of his career. The event typically gives insight to what central bankers are thinking about doing with their upcoming economy-shaping and market-driving monetary policies.

Congress has mandated the Fed to maintain “maximum sustainable employment and stable prices.” The Fed’s decade-long failure to come close to “averaging” a 2% inflation rate is causing a great deal of consternation. So Powell announced “robust changes,” due to the long-term shortage of inflation target achievement, and therefore will be implementing adjustments to try to push the rate over 2% for a period of time, in order to make up for previous deficiencies. Those appear to be bold but hollow words, considering a 10%+ unemployment rate, skyrocketing national debt, and floundering GDP growth.

As expected, the Fed announced plans to maintain rock-bottom interest rates at or near zero percent through the end of 2021. It has posted rates at or below 2% in sixteen out of twenty months since November of 2018. Too much inflation can be an economy-killer, but too little inflation is regularly attributed to a lack of economic growth. As the Fed continues to fumble, in search of the Goldilock’s Zone, it’s become apparent that they’ve decided to leave interest rates low to encourage borrowing, but let inflation rates run higher, even when (or if) employment gets back to normal levels, which could literally take years.

The Fed’s continued insertion of liquidity to Wall Street is sure to prolong the appearance of a thriving stock market, continue the dollar’s plummeting value, and may “ultimately” achieve the Fed’s desired inflation target rate. However, history shows that these dynamics will result in higher prices for gold and other precious metals, as well as bitcoin. So, don’t let today’s increased price of either investment opportunity deter you from acquisition or further expansion. This is only the beginning of skyrocketing prices for both. Call the hedge experts at American Bullion, NOW! Call (800) 653-GOLD (4653).