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Wait it out, hold on to gold? What investors in S’pore can do as ‘stagflation’ risk mounts
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Stagflation hits when there is inflation, like with rising oil prices, but the economy's slowing down, jobs are tight and growth is stagnant.
PHOTO: LIANHE ZAOBAO
- Middle East tensions are raising oil prices, increasing US stagflation risk as consumers cut spending due to rising costs.
- Fed's Powell acknowledges inflation pressure from energy prices but believes stagflation isn't current.
- Investors are mainly maintaining their positions, awaiting more clarity, as traditional safe havens like gold and the yen have underperformed amid a strong US dollar.
AI generated
SINGAPORE – Tensions in the Middle East are driving up oil prices, raising concerns about the risk of stagflation in the US economy and leaving investors wondering how it might impact their portfolios.
Rising oil prices make everyday activities like driving a car or eating a meal more expensive. Consumers then cut back on spending, which could further slow the US economy, already grappling with weakening job growth – all factors contributing to slowing economic growth, which could heighten stagflation risk.
