Unbelievable! Central Banks Take Unprecedented Action In A Quarter Century – Lyn Alden

by | May 19, 2023 | Self Directed IRA

Unbelievable! Central Banks Take Unprecedented Action In A Quarter Century – Lyn Alden




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A recent move by global central banks has caught the attention of investors and financial experts alike. Lyn Alden, an investment strategist and CEO of Lyn Alden Investment Strategy, has referred to it as a “once in a 25-year move.”

What exactly is this move? It pertains to the change in the outlook of central banks regarding inflation.

Historically, central banks have targeted inflation rates of around 2%. However, in recent years, inflation rates have consistently been below this target. This caused concerns in some quarters that central banks were not doing enough to boost growth and inflation.

Now, according to Alden, central banks are shifting their focus to achieving inflation rates exceeding 2%. This represents a significant change in monetary policy that has not been seen for over two decades.

Alden explains that this shift is a response to long-term pressures that have been building over the last decade. Central banks around the world have advocated for the use of low-interest rates and quantitative easing in a bid to stimulate growth over the past decade. However, these measures alone have not been enough to get inflation rates back up to expected levels.

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Instead, central banks are now adopting a “symmetric” approach to inflation targeting. This means that they will allow inflation to rise above 2% to compensate for periods where it has been below this target.

Alden suggests that this move may have far-reaching consequences for investors. For starters, it may mean that central banks will be more likely to keep interest rates low in the future. This could push up asset prices, as investors seek to take advantage of the low borrowing costs on offer.

At the same time, this move may also lead to greater volatility in financial markets. If inflation rates rise above expectations, this could lead to a sudden sell-off in government bonds and other safe-haven assets, as investors worry about the impact of rising inflation on their portfolios.

Overall, Alden believes that the change in central bank policy is a signal that the global economy is undergoing a significant shift. For investors, it means that they will need to be more nimble and adaptable in their investment strategies to take advantage of the changing landscape.

As central banks continue to navigate the challenges of balancing economic growth with inflation control, investors will need to stay tuned to future policy decisions and adjust their portfolios accordingly.

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