KANALCOIN NEWS – The United States Federal Reserve reportedly wants to raise the inflation rate to a certain level. This was done in line with the declining value of the United States dollar and soaring gold prices. The policy also affects various parties, including investors.
The United States Federal Reserve, or what is often called the Fed, has completed a year-long policy review. The Fed found that they needed to raise the inflation rate to a certain degree to solve the problem.
Currently, the condition of the United States dollar has fallen very sharply amid soaring gold prices and increased demand for Inflation-Protected Treasury (TIPS). However, the Fed is reportedly planning to keep interest rates steady.
Until the inflation and unemployment rate targets are reached, the Fed will keep interest rates at low levels. The new Fed will raise interest rates if the inflation target and unemployment rate have been reached.
In line with the Central Fed’s policy, the President of the Federal Reserve Bank of Chicago, Charles L. Evans, said that he would maintain interest rates before inflation reached 2.5 percent.
However, this is not something that can be achieved easily. At least, it will take years to reach that number. That’s because the current inflation rate is just approaching 1 percent and the unemployment rate is even higher than during the massive depression in the United States.
Since the United States’ economic condition began to slump and the value of the United States dollar plummeted, some investors began to look for new ways to protect their funds. One way is to move their investment in alternative assets, including bitcoin.
CEO of Microstrategy Inc., Michael Saylor, said that the company might change its financial strategy regarding the company’s investment. With the weakening US dollar, Saylor is unlikely to invest in dollars.
“If you have a large number of dollar bills and you expect returns of any kind, then that is wrong. Gold, silver and bitcoin are now showing improvement,” Saylor said as quoted by News Bitcoin.
“Dollar, DXY index weakened. Confidence in fiat currencies across markets is fading and we’ve seen that in the rally across most asset classes during the second quarter.”
“Therefore, it is not wise to continue to hold large parts of the USD as part of our financial strategy, and that prompted us to rethink this,” said Saylor.
CFO Microstrategy, Phong Le, also conveyed the same thing as Saylor. In fact, Le admitted that his company would invest up to US$250 million (around Rp. 3.7 trillion) in other assets, including alternative assets..
“We will seek to invest up to another US$250 million over the next 12 months in one or more alternative investments or assets which may include stocks, bonds, commodities such as gold, digital assets such as bitcoin or other types of assets,” said Le.
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