U.S. Treasury Secretary Janet Yellen believes that inflation has significantly decreased, but there is still work to be done for the Federal Reserve to reach its 2% inflation target. She explained that the central bank faces two risks: the possibility that inflation does not decrease to their target as planned, and the risk of the economy becoming too weak.
Yellen Discusses U.S. Economy
In an interview with CNBC on Wednesday, U.S. Treasury Secretary Janet Yellen discussed the current state of the U.S. economy, coinciding with the Federal Reserve's decision to keep interest rates unchanged for the third consecutive time.
While acknowledging that "Inflation has come down significantly," Yellen cautioned that the Fed still has work to do to achieve its 2 percent objective. However, she expressed confidence in the progress made so far, stating that there has been a consistent pattern of inflation decreasing over time. According to the U.S. November Consumer Price Index, inflation rose by 3.1% on an annual basis.
Addressing concerns about a potential recession, Yellen stated:
Even in any given year, regardless of economic knowledge, there is always a recession risk of over 10%. So, there is always some level of recession risk. However, I don't believe it is particularly high at the moment. Consumer spending has remained strong.
"Over time, people will gradually feel more optimistic about the economy," emphasized Yellen. She acknowledged that people have noticed price levels in certain cases are higher than before the pandemic. Yellen specifically mentioned rent as an example, stating that apartment rentals, in particular, have seen an increase.
Yellen reiterated her belief that the U.S. economy is heading towards a soft landing, expressing optimism that growth will continue into 2024. She stated, "I think there's a reasonable chance we will achieve it. I believe we are on that trajectory. My expectation is for a soft landing."
Regarding the possibility of the Federal Reserve reducing interest rates next year, Yellen expressed her view: "As inflation decreases, it is natural for interest rates to also decrease to some extent. This is because real interest rates would otherwise rise, which could lead to tighter financial conditions." She further added:
The Federal Reserve has two risks to manage. The first is the possibility that inflation does not decrease to their target as planned, and the second is the risk of the economy becoming too weak. I will leave the decision on that to them.
What are your thoughts on the statements made by Treasury Secretary Janet Yellen? Share your opinions in the comments section below.
Frequently Asked Questions
Which is more powerful: sterling silver or 14k gold?
Gold and silver are strong metals, but sterling silver is much less expensive because it contains 92% pure silver rather than just 24%.
Sterling silver is also known by the name “fine silver” because it is made up of a mixture from silver and metals like zinc, copper, and zinc.
Gold is generally considered to be very strong. It takes a lot of pressure to break it down. If you dropped an object onto a piece or gold, it would break into thousands instead of two halves.
Silver isn't nearly as strong as either gold or silver. If you dropped an item onto silver sheets, it would likely fold and bend without cracking.
Silver is used in jewelry and coins. Its value fluctuates based on demand and supply.
How do you withdraw from an IRA that holds precious metals?
If your account is with a precious metal IRA firm such as Goldco International Inc., you may want to consider withdrawing funds. You can sell your metals at a higher price if they are still in the account than if you left them there.
Here's how to withdraw your precious metal IRA money.
First, find out whether your precious metal IRA provider allows withdrawals. Some companies allow this option, while others don't.
Second, consider whether your sale of metals can allow you to take advantage tax-deferred profits. Many IRA providers provide this benefit. Some IRA providers offer this benefit, but others don't.
Third, you should check with the provider of your precious metal IRA to determine if there are fees for these steps. Extra fees may apply for withdrawals.
Fourth, ensure that you keep track your precious metal IRA investment for at least 3 years after selling them. You should therefore wait until January each year to calculate capital losses on your investment portfolio. You will then need to file Form 8949 which contains instructions on how to calculate the amount of gain that you have realized.
In addition to filing Form 8949, you must also report the sale of your precious metals to the IRS. This will ensure that you pay taxes on any profit earned from your sale.
Consult a trusted attorney and accountant before selling your precious materials. They can help you avoid costly mistakes and ensure you comply with all regulations.
Are gold IRAs a good place to invest?
An investment in gold can be made by buying shares of companies that mine it. This is a good way to make money when you invest in gold and other precious metals like silver.
But, owning shares in direct form has two downsides:
The first is that you could lose money if your stock is held on for too long. Stocks will fall faster than the underlying asset (like a gold mine) when they drop. That means you could end up losing money instead of making it.
Second, waiting for the market to recover before selling your gold holdings could result in you missing out on potential profits. Be patient and wait for the market's recovery before you make any profits from your gold holdings.
Physical gold can be beneficial if you prefer to keep investments separate from your finances. A gold IRA will help protect your portfolio from inflation and diversify it.
You can learn more about gold investing by visiting our website.
What are the pros & con's of a golden IRA?
The gold IRA is a great way to diversify your portfolio, but you don't have access the traditional banking services. It allows you invest in precious metals like platinum, silver, and gold without any taxes, until they're withdrawn.
The downside is that early withdrawals will result in ordinary income taxes on earnings. However, creditors will not be able to seize these funds if you default on your loan.
A gold IRA might be the right choice for you if you enjoy owning gold and don't worry about taxes.
Statistics
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- Silver must be 99.9% pure • (forbes.com)
External Links
wsj.com
kitco.com
regalassets.com
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
How to Open a Precious Metal IRA
Precious metals remain one of the most highly-valued investment options. Precious metals are a popular investment option because they provide investors with higher returns than traditional bonds and stocks. However, precious metals investing requires careful planning and research. Here are the basics to help you open your precious metal IRA account.
There are two types of precious metal accounts. They are paper gold and silver certificates (GSCs) and physical precious metals accounts. Each type has its pros and cons. For example, physical precious metals accounts offer diversification benefits, while GSCs are easy to access and trade. To learn more about these options, keep reading below.
Physical precious metals accounts can be used to hold bullion, coins and bars. This option offers diversification benefits but also has some drawbacks. For instance, the costs associated with buying, storing, and selling precious physical metals are quite expensive. Moreover, their large size can be difficult to transport them from one location to another.
However, silver and gold certificates made of paper are quite affordable. These certificates can also be traded online, and they are easy to access. They're a great choice for people who don’t want precious metals. But they don't offer as much diversification as their physical counterparts. Also, since they're backed by government agencies such as the U.S. Mint, the value of these assets could decrease if inflation rates rise.
Make sure you choose the right account to suit your financial situation when opening a precious Metal IRA. Consider the following:
- Your tolerance level
- Your preferred asset allocation strategy
- What time do you have available to invest?
- No matter if you intend to use the funds in short-term trading.
- What type of tax treatment do YOU prefer?
- What precious metal(s), would you like to invest?
- How liquid should your portfolio be?
- Your retirement age
- You'll need somewhere to keep your precious metals
- Your income level
- Your current savings rates
- Your future goals
- Your net worth
- Any special circumstances that may affect your decision
- Your overall financial situation
- Preference between paper and physical assets
- Your willingness to take on risks
- Your ability to deal with losses
- Your budget constraints
- You desire to be financially independent
- Your investment experience
- Precious metals are familiar to you
- Your knowledge about precious metals
- Your confidence in the economy
- Your personal preferences
Once you've chosen the right type of precious Metal IRA to suit your needs, it is time to open a dealer account. These dealers can be found via referrals, word-of-mouth, and online research.
After opening your precious metal IRA you will need to decide how big you want it to be. You should note that every precious metal IRA account has a different minimum deposit amount. Some accounts will only accept $100, others will allow for you to invest as high as $50,000.
As mentioned above, you can decide how much money you want to invest in your precious metal IRA. A larger initial deposit is better if you are looking to build wealth over a longer period of time. On the other hand, if you're planning on investing smaller sums of money every month, a lower initial deposit might work better for you.
You have many options when it comes to the type of investments you can make. These are the most popular:
- Bullion bars, rounds and coins in gold – Gold
- Silver – Rounds and coins
- Platinum – Coins
- Palladium-Bar and Round Forms
- Mercury – Round or bar forms
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