Fed Fails to Deliver While Investors Turn to Gold in 2024

Don’t Count on the Fed: Protect Your Personal Economy with Gold

As expected, the Federal Reserve held its benchmark interest rate at a 23-year high at the close of today’s central bank meeting. The fed funds rate stands at 5.25%-5.50% as inflation continues to hold a tight grip on the U.S. economy.

From 2022 until 2023, the fed hiked interest rates 11 times in an attempt to tame runaway inflation. To date, the Fed has failed in its efforts, as inflation remains stubbornly above the central bank’s 2% target inflation rate.

Stocks took a slight hit when the Fed signaled only a single rate cut for 2024, down from their previously forecast three. Sticky inflation has put those cuts on the backburner for now.

Gold, on the other hand, rose close to $20 per ounce on the news.

While economists insist the US economy is in a good shape, Americans say otherwise.

Sure, gross domestic product (GDP) is expanding, and the labor market is strong. Yet, survey after survey reveals that Americans are unhappy about their personal economy – as inflation continues to bite into their everyday spending, and high interest rates makes borrowing vastly more expensive.

Despite Eleven Rate Hikes, Inflation Has Not Released Its Stubborn Grip

The most recent May Consumer Price Index (CPI) jumped 3.3% from a year ago, while core prices that exclude food and energy climbed 3.4% from a year ago, the Labor Department reported this morning. The CPI is a broad inflation gauge that measures what a basket of goods and services costs across the country.

Americans continue to pay sharply higher prices in 2024 than they did before the pandemic. The high interest rates are putting the brakes on some Americans as they try to buy homes, finance a car or even finance household appliances or refrigerator.

The 2024 Rush Into Gold 

Throughout the first half of 2024, gold has been quietly and steadily climbing to new record high after high, leaping above the $2,400 an ounce level in May, before pulling back slightly in June. Gold is now up 12% from the start of the year. The current gold dip offers long-term investors – like you – an excellent entry point to increase your allocation to tangible assets like gold and silver. Current conditions allow you to trade your dollars for even more gold.

Looking Ahead 

There are four more Fed meetings in 2024 – in July, September, November and December. No matter when the Fed cuts rates, or by how much, it will do little to help heal the pain of higher interest rates for Americans. For example, if we were to see two rate cuts later this year (which is debatable), it would take the Fed’s key interest rate back to a still high 4.75-5%, a level that, before current times, hadn’t been seen since 2007.

The Fed has demonstrated over the past several years its inability to control or tame inflation. You can’t control the Fed or the US economy, but you can protect, preserve and grow your personal economy with an increased allocation to physical gold and silver. For over 5,000 years gold has been a proven store of value and vehicle to build wealth. Do you own enough? Questions? We are here to help.