Displaying items by tag: inflation

With markets shaky despite record highs, investors are turning to commodity ETFs as a hedge against inflation and uncertainty driven by Trump-era tariffs and policy risks. Commodity prices tend to rise with inflation, making them attractive during volatile periods, and ETFs offer simplified access to hard assets like gold, oil, and copper without the complexity of futures trading. 

The Invesco PDBC fund leads the space with $4.7 billion in assets and diversified exposure, notably in energy and metals, all while avoiding cumbersome K-1 tax forms. Meanwhile, the actively managed First Trust FTGC ETF charges higher fees but provides exposure to a wider range of commodities, including agriculture and precious metals. 

For those focused on specific assets, the iShares Gold Trust (IAU) offers low-cost access to gold, while the CPER fund targets copper futures, riding recent price momentum in industrial metals. 

Finsum:  ETFs provide accessible, diversified, and tax-friendly ways for investors to gain exposure to commodities within traditional brokerage accounts.

U.S. stocks ended mostly flat after the Federal Reserve held interest rates steady and signaled slower future cuts, while geopolitical tensions between Israel and Iran pushed oil prices higher. 

Fed Chair Jerome Powell emphasized that future rate decisions will remain data-dependent and warned of rising consumer prices this summer due to Trump’s new tariffs. Despite earlier gains, markets lost momentum following the Fed’s cautious tone; the Dow slipped 0.10%, the S&P 500 dipped 0.03%, and the Nasdaq edged up 0.13%. 

Meanwhile, Brent and WTI crude rose slightly amid fears of broader Middle East conflict and supply disruptions. U.S. Treasury yields, initially lower on safe-haven demand, rebounded after Powell’s comments on inflation. 

Finsum: Economic data added to uncertainty, with retail sales declining sharply in May and jobless claims suggesting weakening labor market momentum.

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.