đ” The Fed is playing with fire: Inflation below 1%⊠and deflation is looming đ„
âŹ ïž Important information for investors:
Recent estimates suggest that real inflation may be below 1% â significantly lower than prevailing market expectations.
đ· The looming danger: Deflation
Deflation is more dangerous than high inflation because it leads to:
âȘïž Falling prices and profits
âȘïž Weak demand
âȘïž Pressure on businesses and markets
âȘïž A broader economic slowdown
đ· Tight monetary policy
Continuing monetary tightening at this time could increase the risk of entering a deflationary phase, making markets more sensitive to any future decision.
âŹ ïž Why does this matter to you as an investor?
đč Deflation could put downward pressure on asset prices
đč Volatility could rise sharply
đč The timing of market entry and exit becomes more critical
đč Risk management is a necessity, not an option
âŹ ïž In conclusion: Understanding the direction of monetary policy now is your first line of defense for your investment portfolio.
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