The US Federal Reserve’s next meeting is quickly approaching, and investors have questions about the economy.
Chief among them is whether the country is heading toward a recession. Speaking to the Investing News Network, Marc Lichtenfeld, chief income strategist at the Oxford Club, said he’s been backing away from that forecast for some time.
For one thing, US unemployment is near record lows while wages are increasing. “It’s difficult to have a recession with a situation where everybody’s working and getting paid more,” he noted. For another, the stock market has been hot in 2023.
“Generally speaking, if everybody coming into this year was very worried about a recession, and then the market takes off the way it has, that’s a strong signal that we may not get that recession that we’re all expecting,” Lichtenfeld said.
However, other indicators suggest a recession is indeed on the horizon. Those include the inverted yield curve, as well as a falling Chinese producer price index. “Regardless of what the cause is, if those prices continue to come down that should also bring prices further down in the US. At this point it’s a little difficult to see exactly what effect that will have,” he said.
Emphasizing that he isn’t a permabull, Lichtenfeld said he’s bullish on gold and most metals in this environment.
“Right now I am bullish on gold. The main reason is the US dollar has been falling. We were near 20 year highs not that long ago, but it has been falling pretty rapidly over the last few months, and so gold is a great hedge against that,” he noted. “Also, even though inflation is coming down it has been significantly higher, and just in general for the long term gold is a good hedge against inflation. So if you do believe that there’s still some inflation left to be worked out, then that’s another reason to own some gold.”
Watch the interview above for more of Lichtenfeld’s thoughts on other commodities, his strategy for investing in dividend stocks and where he sees the most attractive dividends at the moment.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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