Displaying items by tag: inflation

Silver surged to its highest level in 13 years and platinum hit peaks not seen since early 2022, as investors piled into industrial precious metals amid strengthening fundamentals and market momentum. Both metals extended sharp gains from the prior session, with silver rallying past $36 an ounce and platinum climbing nearly 3%, while gold pulled back slightly following stronger-than-expected U.S. jobs data that cooled rate-cut expectations. 

Renewed physical demand—especially for silver in India and platinum in China—has supported the rally, alongside a tightening supply outlook that’s pushing both markets toward deficits this year. 

Silver’s role in solar panel production and platinum’s use in auto catalysts and lab equipment continue to anchor their industrial relevance, fueling investor interest. Analysts note that holding silver above $35 could reignite retail demand, while platinum-backed ETFs are seeing a resurgence, hinting at a broader speculative move. 

Finsum: With palladium also joining the rally and ETF inflows rising, the precious metals space is regaining serious momentum even as gold temporarily steps back.

JPMorgan CEO Jamie Dimon cautioned that inflation risks remain elevated and markets are too complacent, despite the recent tariff pause between the U.S. and China. Speaking at JPMorgan’s investor day, he emphasized the potential for stagflation—sluggish growth, high unemployment, and persistent inflation—as more likely than many assume. 

While markets rallied on the news of tariff reductions, Dimon noted that the economic impact of still-high duties has yet to fully hit. 

JPMorgan lowered its recession odds for 2025 to 50%, but warned that unresolved trade tensions could reignite instability. Experts echoed that the current tariff rollback is temporary, and the underlying threat of renewed trade conflict looms. 

Finsum: Dimon’s remarks suggest investors are underestimating long-term risks, particularly if inflationary pressures persist amid constrained economic growth.

When evaluating new forms of digital money, it’s essential to clarify what problems they solve and how effectively they do so. The new USDi stablecoin aims to serve as an inflation-protected form of cash by tying its value to changes in the Consumer Price Index (CPI) since December 2024. 

Unlike traditional inflation-protected securities like TIPS, which can lose value when interest rates rise, USDi offers a form of cash that maintains its purchasing power without interest rate risk. Michael Ashton likens USDi to an inflation-linked savings account, calling it a potential “end of the risk line” for holding cash.

The coin is designed to be minted and burned based on daily CPI updates, anchoring it to real-world inflation data. However, for stablecoins like USDi to achieve mainstream use, they must overcome key challenges like merchant adoption, user-friendly wallets, and seamless onboarding to compete with familiar payment systems.

Finsum: This is a leg up in the crypto world, and a sign that creators are thinking about the relationship with traditional macro pressures. 

In a high-inflation environment, variable annuities offer a unique blend of investment growth and guaranteed income, making them an attractive option for certain retirees. Unlike fixed annuities, their value rises and falls with market performance, allowing for inflation-beating potential over time. 

They also provide tax-deferred growth and the option to convert savings into a predictable income stream that can last for life. Optional riders can offer added benefits like long-term care coverage or income guarantees, though these come with additional fees. 

However, high costs, market risk, and limited liquidity make them unsuitable for all investors. 

Finsum: For those who’ve maxed out other retirement vehicles and can tolerate some risk, variable annuities may help protect purchasing power while delivering steady income.

Economic data from the first quarter indicates slowing growth alongside rising inflation, raising concerns about stagflation. February’s PCE price index, the Fed’s preferred inflation gauge, showed its highest reading in a year, while inflation-adjusted consumer spending barely increased. 

GDP is now projected to shrink by 0.5% annually, as rising imports ahead of new tariffs weigh on growth. The University of Michigan’s consumer sentiment survey reflects increasing pessimism, with inflation expectations rising and job market concerns deepening. 

Meanwhile, Fed officials acknowledge that upcoming tariffs will likely push inflation higher, constraining their ability to cut interest rates. 

Finsum: With economic uncertainty mounting, Americans are bracing for a difficult year ahead, but they need financial products that can be robust to these risks.