There has been much back and forth with the current state of the economy, and what could lie ahead for 2022. Bloomberg has released a list of the biggest economic risks for next year, which include increased issues with inflation, Fed rate hikes leading to a possible recession, further falls with China’s economy, and more. In other news, investors are keeping a close eye on the Fed’s final monetary policy decision of 2021, which may include more signaling of a monetary policy adjustment.

 

Bloomberg via Mint/Tom Orlik, Maeva Cousin, and Enda Curran
What Could Possibly Go Wrong? These Are the Biggest Economic Risks for 2022

The Covid years are littered with predictions that didn’t work out. For anyone looking ahead into 2022, that should be enough to give pause.

Most forecasters, including Bloomberg Economics, have as their base case a robust recovery with cooling prices and a shift away from emergency monetary-policy settings. What could go wrong? Plenty.

Omicron, sticky inflation, Fed lift-off, China’s Evergrande slump, Taiwan, a run on emerging markets, hard Brexit, a fresh euro crisis, and rising food prices in a tinder-box Middle East — all these feature in a rogues’ gallery of risks.

Some things might go better than expected too, of course. Governments may decide to keep fiscal support in place. China’s latest Five Year Plan could catalyze stronger investment. Pandemic savings might fund a global spending splurge.

Keep reading the story, here.

 

Reuters via Kitco News/Bharat Gautam
Gold steadies as investors prepare for Fed taper timeline

Gold steadied on Monday as the market focus pivoted to this week’s Federal Reserve meeting to learn how quickly it plans to unwind economic support measures introduced in response to the coronavirus pandemic.

Spot gold was last up 0.3% at $1,787.61 per ounce as of 1205 GMT. U.S. gold futures gained 0.2% to $1,788.50.

Prices rose as much as 0.8% on Friday following data showing U.S. consumer prices rose further in November, leading to the largest annual gain since 1982.

“In the short- to medium-term, gold’s not going to be going anywhere until we get an idea of how much the Fed accelerates tapering and whether or not they are particularly hawkish in their statement, which could help yields and pressure gold,” said Michael Hewson, chief market analyst at CMC Markets UK.

Continue reading, here.

 

CNBC/Jeff Cox
El-Erian says ‘transitory’ was the ‘worst inflation call in the history’ of the Fed

Calling inflation “transitory” was a historically bad move for the Federal Reserve, according to Allianz Chief Economic Advisor Mohamed El-Erian.

“The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy mistake,” the former Pimco CEO and current Queens’ College president said Sunday on CBS’ “Face the Nation.”

“So, the Fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility,” he added. “Otherwise, it will become a driver of higher inflation expectations that feed onto themselves.”

You can read the full story, here.

 

 

 

 

 

 

 

 

 

 

 

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