Since last year, the Fed’s benchmark short term borrowing rate has been tethered close zero, and the central bank is continuing to purchase debt to the tune of at least $120 billion in bonds each month. Core inflation is running around 1.4%, substantially lower than the Fed’s 2% target.
“If inflation were to move up in ways that are unwelcome, we have the tools for that, and we will use them,” he said. “No one should doubt that.”
Powell sounded sanguine about prospects for the economy in the coming year, acknowledging the unemployment data from Thursday, where first-time claims for unemployment insurance reached 965,000 last week, significantly more than a prediction of 800,000 new claims from economists surveyed by Dow Jones..
“We were in a good place in February of 2020, and we think we can get back there, I would say, much sooner than we had feared,” he said.
“Every economy, and certainly our economy, faces plenty of longer-run challenges,” he said. “But I would say there were no obvious imbalances that threatened the ongoing expansion. You really can’t identify something that looked like if this blows up, the expansion.”
For investors looking at ETFs to trade in an environment with inflationary questions, Horizon Kinetics LLC has announced the launch of its first ETF, the Inflation Beneficiaries ETF (INFL), an actively managed fund that began trading on the New York Stock Exchange (NYSE) on Tuesday.
“This portfolio is designed to provide a full cycle inflation exposure and seeks to thrive under many different inflation scenarios. We believe this is possible because the Fund emphasizes companies that have exposure to inflationary underlying assets, yet do not have high capital intensity,” added James Davolos, Portfolio Manager.
For more information about INFL, please visit https://horizonkinetics.com/products/etf/infl/. For more information about Horizon Kinetics, visit www.horizonkinetics.com.
For more market trends, visit ETF Trends.
newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFTrends.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.