The highly anticipated Mueller report has now come and gone. What could have resulted in significant market volatility and a major sell-off has ended up more like a whimper, having little to no impact on markets today. To be clear, however, the report could lead to additional political fighting as Democrats seek to see and release the full report and as other investigations continue. With the special counsel investigation now over, however, investors may again focus their attention elsewhere.
The inverted yield curve caught the market’s attention late last week and has been the subject of significant coverage. The curve inverted for the first time since 2007 and such a condition is widely considered to be a reliable recession indicator. The inversion comes at a time when investors are already nervous over continuing U.S./China trade talks and fading effects from tax cuts and government spending.
In its last meeting, the Fed seemed to acknowledge some serious risks to the economy as the central bank sounded even more dovish than most had anticipated. The central bank has now walked back its previous forecast for another two rate hikes this year and has also cut its growth forecast as well. The Fed sees some significant economic headwinds in the months ahead and the bond market is now sending a very clear signal to watch out.
The Fed finds itself in a very difficult position currently as the next recession approaches. With the current Fed Funds rate at just 2.25%-2.50%, the central bank will not be able to create the same shock-and-awe effects it did when it lowered rates in 2008/2009 from 5.25%-5.50% down to zero. Not only that, but the Fed’s balance sheet may present another problem as well. At its height, the Fed’s balance sheet swelled to some $4.5 trillion, and it is currently sitting at about $3.9 trillion. With so many assets still on the books, the Fed could be reluctant to implement QE4 and may have far fewer tools to fight the next major slowdown. This could lead to not only a very deep recession but also a significantly longer recession in the months or years ahead.
The warning alarm has been sounded, and with the potential for an ineffective Fed response now is the time to take action before the next recession sets in. Now may be the ideal time to add diversity with asset classes that can potentially outperform during a major downturn. Now may be the ideal time to add gold.
This asset class not only has tremendous upside price potential but also may act as a significant hedge against rising inflation, a weaker dollar and lower stocks.
Adding this key asset class to your portfolio has never been easier and never more important. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and how this asset may play a key role going forward. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the next major recession to sink stocks before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: 401k gold, add gold to my ira, advantage gold, best way to buy gold, best way to invest in gold, central bank, china, Fed, inverted yield curve, mueller report, recession