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US inflation begins to climb, but will it last?
Washington (AFP) - Inflation is moving higher in the United States, government data said on Tuesday, but economists say there's no cause for alarm yet, despite massive stimulus spending that's prompted worries of an impending price spike. From Wall Street to Washington, politicians and traders have been bracing for an uptick in inflation as Covid-19 vaccines help the world's largest economy reopen, spurring demand for goods and services that were ignored as the pandemic upended daily life in 2020. They're also monitoring the impact of massive spending measures the government approved to help t...
AFP
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US inflation data delayed by website glitch, shows wholesale price jump
Washington (AFP) - Annual US wholesale inflation spiked to its highest rate in nearly a decade last month, but the news was delayed by a glitch on the Labor Department's website Friday. "Sorry for the delay in the PPI release, folks," the department's Bureau of Labor Statistics (BLS) tweeted, followed by a thread with the details on the data. At the normal release time of 8:30 am (1230 GMT) interested observers were met with a message saying: "The BLS website is busy. Refresh page and try again." The report showed signs the reopening economy is seeing prices rebound, something economists and t...
AFP
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Gold Continues To Face Off With Treasury Yields
Many factors affect the gold price, but Treasury yields have been the one factor that’s been weighing more heavily than the others of late. Last week, the Federal Open Market Committee doubled down on its dovish stance, boosting gold prices as a result. Q4 2020 hedge fund letters, conferences and more The FOMC said it would allow inflation to run above its 2% target for an extended period, which weighed on the U.S. dollar. The dollar is generally negatively correlated with gold prices, so at first, the news was good for the yellow metal. However, Treasury yields have continued to rise in the d...
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Rising US energy prices push February inflation higher
Washington (AFP) - Rising energy prices drove US consumer inflation up 0.4 percent in February, and the rate for the past 12 months accelerated to 1.7 percent, the government reported Tuesday. The cost of gasoline at the pump surged 6.4 percent last month, while fuel oil jumped 9.9 percent and natural gas rose 1.6 percent, the Labor Department said. Excluding food and energy, the "core" Consumer Price Index (CPI) edged up just 0.1 percent compared to January, and was up 1.3 percent for the past year, the report said. A wave of price increases has been expected as the US economy returns to more...
AFP
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Top Six Reasons Why Now Is An Excellent Time To Invest In Hotel Real Estate
There are many reasons to like hotel real estate as an investment; however, with the COVID-19 pandemic raging and the resulting devastation inflicted on travel and hospitality, you may balk at the idea of running toward an asset class that everyone is apparently running away from. We are all reading the same headlines describing the unprecedented impact the pandemic is having on the airline and hotel industries. To be sure, hotel owners, operators, lenders, and especially hotel employees are suffering greatly through the pandemic with seemingly no end in sight. However, it is important to keep...
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Inflation hawks critique Biden's $1.9 tn spending plan
Washington (AFP) - President Joe Biden's $1.9 trillion proposal aimed at revitalizing the US economy has drawn skepticism from some economists, including a former Treasury secretary who is also a member of his Democratic Party. Larry Summers's warning last week that the plan could cause inflation to rise and crowd out other investment priorities has sparked a debate over whether Biden's proposal is excessive, even for an economy that has sustained massive damage during the pandemic. Here is a look at the debate over whether the spending package would cause an inflation uptick in the United Sta...
AFP
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Interest Rates, Inflation And Stock Prices
Given the intense interest in the relation between stock prices, interest rates, and inflation, it is worthwhile to review basic concepts that tie them together. To start, it is critical to be clear what is meant by the interest rate – is it real or nominal? To review the difference, the chart below plots the yield on both the constant maturity 10-year Treasury bonds and 10-year Treasury Inflation Indexed Securities or TIPS. If you buy a TIPS you get the stated yield plus an offset for inflation. Therefore, the yield on the TIPS is a real yield because it is what you earn in inflation adjusted...
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Will Interest Rate Increase Cause Gold to Plunge in 2021?
The decline in the real interest rates is the most important downside risk for gold. Will it materialize, plunging the price of the yellow metal? Q4 2020 hedge fund letters, conferences and more Increase In Real Interest Rates Is A Downside For GoldThe rise in inflation is the most significant upside risk for gold this year, but there are also a few important downside risks. The most disturbing for us is the possibility that the real interest rates will increase. Why? Please take a look at the chart below. As you can see, there is a strong negative correlation between the real yields and gold ...
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Powell: Inflation Can Rise In 2021 – So What Happens to Gold?
The first FOMC meeting in 2021 has concluded without any changes in monetary policy, while Powell sent a few dovish signals during his press conference. Q4 2020 hedge fund letters, conferences and more Powell: Inflation May Rise In 2021The FOMC released on Wednesday (January 27) its newest statement on monetary policy . Generally speaking, the statement was little changed. The main alteration is that the U.S. central bank has acknowledged that “the pace of the recovery in economic activity and employment has moderated in recent months”. Wow, how did they notice that? They really must hire prof...
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Will Inflation Make Gold Shine in 2021?
Inflation will be one of the greatest upside risks for gold in 2021. Will it materialize and make gold shine? Q4 2020 hedge fund letters, conferences and more Gold In 2021 Is Incomplete Without InflationThe report about gold in 2021 would be incomplete without the outlook for inflation . We have already written about it recently, but this topic is worth further examination. After all, higher inflation is believed to be one of the biggest tail risks in the coming months or years, and one of the greatest upside risks for gold this year . Most economists and investors still believe that inflation...
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