The Federal Reserve left interest rate and monetery policy unchanged. This indicates that the US is incomplete economic recovery until now.
Some economic experts believe that Federal Reserve will be wrong on inflation being temporary. From my point of view, it is quite difficult to predict inflation at this moment. Fears about the highly contagious Delta variant of Covid-19 leading to another round of economic slowdown. However, rising infection cases will cause more supply chain interruptions leading to more inflation.
Meanwhile, some leading companies expressed that they are passing rising costs along to consumers which point out that some inflation will stick around.
As there are industry raw material inflation and higher transportation costs, implementing additional prices increases become necessary.
Another concern is that it is stagflation instead of transitory inflation. That toxic combination of slowing growth and rising prices is a real risk and a dangerous signal of stagflation.
Theoretically, stagflation will trigger bullish markets for commodity and bullions. If there is rising inflation, investors will look at hard assets including bullion markets, like Gold, Silver, Platinum.
Do you believe that bullions prices are starting to rise again?
Let me know your thought.