Treasury Secretary Janet Yellen, in a recent interview with CNBC, shared her insights on the state of the US economy and the potential risks it faces. As the Federal Reserve maintains its current interest rates, Yellen highlighted the importance of managing two key risks: inflation not reaching the target and a weakened economy.
Yellen's Perspective on the US Economy
Yellen acknowledged that inflation has decreased significantly but stressed that there is still progress to be made in achieving the Federal Reserve's 2% inflation target. She expressed optimism, stating that there is a consistent pattern of inflation gradually declining over time. The US November Consumer Price Index reported a 3.1% increase compared to the previous year.
Addressing concerns about a potential recession, Yellen noted that there is always a risk of a recession, even in any given year. However, she reassured that she does not perceive the risk to be particularly high. Yellen highlighted the resilience of consumer spending, which has remained solid.
Yellen emphasized that over time, people will become more confident in the economy despite noticing higher prices in certain areas, such as rent. She believes that a soft landing is achievable for the US economy, with a reasonable chance of continued growth in 2024.
When asked about the possibility of the Federal Reserve cutting interest rates next year, Yellen explained that as inflation decreases, it is natural for interest rates to follow suit. By lowering interest rates, financial conditions can be prevented from becoming overly restrictive. However, Yellen left the decision-making regarding interest rates to the Federal Reserve.
What are your thoughts on Treasury Secretary Janet Yellen's statements? Share your opinions in the comments section below.
Frequently Asked Questions
How Much of Your IRA Should Be Made Up Of Precious Metals
You should remember that precious metals are not only for the wealthy. It doesn't matter how rich you are to invest in precious metals. You can actually make money without spending a lot on gold or silver investments.
You might consider purchasing physical coins, such as bullion bars and rounds. It is possible to also purchase shares in companies that make precious metals. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.
No matter what your preference, precious metals will still be of benefit to you. They are not stocks but offer long-term growth.
And, unlike traditional investments, their prices tend to rise over time. If you decide to sell your investment, you will likely make more than with traditional investments.
Should You Buy Gold?
Gold was a safe investment option for those who were in financial turmoil. Many people today are moving away from stocks and bonds to look at precious metals, such as gold, as a way to diversify their investments.
The trend for gold prices has been upward in recent years but they still remain low relative to other commodities like silver and oil.
This could be changing, according to some experts. Experts predict that gold prices will rise sharply in the wake of another global financial collapse.
They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.
Consider these things if you are thinking of investing in gold.
- First, consider whether or not you need the money you're saving for retirement. You can save money for retirement even if you don't invest in gold. That said, gold does provide an additional layer of protection when you reach retirement age.
- Second, ensure you fully understand the risks involved in buying gold. Each type offers varying levels and levels of security.
- Finally, remember that gold doesn't offer the same level of safety as a bank account. Your gold coins may be lost and you might never get them back.
If you are thinking of buying gold, do your research. If you already have gold, make sure you protect it.
Are gold investments a good idea for an IRA?
Anyone who is looking to save money can make gold an excellent investment. It can be used to diversify your portfolio. There's more to gold that meets the eye.
It's been used throughout history as a currency, and even today, it remains a popular form of payment. It's often referred to as “the world's oldest currency.”
Gold, unlike other paper currencies created by governments is mined directly from the earth. This makes it highly valuable as it is hard and rare to produce.
The supply and demand factors determine how much gold is worth. The strength of the economy means people spend more, and so, there is less demand for gold. This results in gold prices rising.
On the flip side, people save cash for emergencies and don't spend it. This leads to more gold being produced which decreases its value.
This is why gold investment makes sense for both individuals and businesses. If you make an investment in gold, you can reap the economic benefits whenever the economy is growing.
Also, your investments will earn you interest which can help increase your wealth. Plus, you won't lose money if the value of gold drops.
What precious metal should I invest in?
The answer to this question depends on how much risk you are willing to take and what type of return you want. While gold is considered a safe investment option, it can also be a risky choice. Gold may not be right for you if you want quick profits. You should invest in silver if you have the patience and time.
If you're not looking to make quick money, gold is probably your best choice. However, silver might be a better option if you're looking for an investment that provides steady returns over long periods.
How to Open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). If you do, you must open the account by completing Form 8606. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form must be submitted within 60 days of the account opening. You can then start investing once you have this completed. You can also contribute directly to your paycheck via payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. The process for an ordinary IRA will not be affected.
You'll need to meet specific requirements to qualify for a precious metals IRA. The IRS stipulates that you must have earned income and be at least 18-years old. You can't earn more than $110,000 per annum ($220,000 in married filing jointly) for any given tax year. Contributions must be made regularly. These rules apply to contributions made directly or through employer sponsorship.
You can invest in precious metals IRAs to buy gold, palladium and platinum. You can only purchase bullion in physical form. This means that you will not be allowed to trade shares or bonds.
You can also use your precious metals IRA to invest directly in companies that deal in precious metals. This option can be provided by some IRA companies.
However, there are two significant drawbacks to investing in precious metals via an IRA. First, they're not as liquid as stocks or bonds. It is therefore harder to sell them when required. Second, they are not able to generate dividends as stocks and bonds. Therefore, you will lose money over time and not gain it.
What precious metals can you invest in for retirement?
These precious metals are among the most attractive investments. Both can be easily bought and sold, and have been around since forever. They are a great way to diversify your portfolio.
Gold: Gold is one the oldest forms currency known to man. It is very stable and secure. It is a good way for wealth preservation during uncertain times.
Silver: Silver has always been popular among investors. It is an excellent choice for investors who wish to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinum: A new form of precious metal, platinum is growing in popularity. It's like silver or gold in that it is durable and resistant to corrosion. However, it's much more expensive than either of its counterparts.
Rhodium: Rhodium can be used in catalytic convertors. It's also used in jewelry making. And, it's relatively cheap compared to other types of precious metals.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It is also cheaper. This is why it has become a favourite among investors looking for precious metals.
Statistics
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
External Links
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Legal – WSJ
bbb.org
investopedia.com
How To
The History of Gold as an Asset
From ancient times to the beginning of the 20th century, gold was used as a currency. It was universally accepted due to its purity and divisibility, beauty, scarcity, and durability. Aside from its inherent value, it could be traded internationally. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. For example in England, a pound sterling equals 24 carats. In France, a livre tournois equals 25. Carats of golden. Germany had one mark which equals 28. Carats.
In the 1860s, the United States began issuing American coins made up of 90% copper, 10% zinc, and 0.942 fine gold. This caused a drop in foreign currency demand which resulted in an increase of their prices. In this period, large amounts of gold coin were minted by the United States, which caused the gold price to drop. The U.S. government needed to find a solution to their debt because there was too much money in circulation. They sold some of their excess gold to Europe to pay off the debt.
Many European countries didn't trust the U.S. dollars and started to accept gold for payment. After World War I, however, many European countries started using paper money to replace gold. The price of gold has risen significantly since then. Although the price of gold fluctuates today, it remains one of your most safe investments.
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By: Kevin Helms
Title: Treasury Secretary Janet Yellen Discusses US Economy, Recession Risk, Soft Landing
Sourced From: news.bitcoin.com/treasury-secretary-janet-yellen-discusses-us-economy-recession-risk-soft-landing/
Published Date: Thu, 14 Dec 2023 23:00:27 +0000
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