In Q1 2024, the US crossed the historic milestone of paying over $1 trillion on interest payments. As a consequence of an unprecedented $5 trillion money supply boost since 2020, the US experienced an equally rapid inflation rise not seen since the 1980s.since the 1980s, causing it to pay more in interest. Concurrently, by October 2023, the USG had already tallied a $1.7 trillion budget deficit, making it 6.3% of gross domestic product .
Interlinked, the Fed is less likely to cut interest rates despite historic interest payments and inflation if there is a sustained lower demand for Treasuries. The central bank then has to balance huge budgetary deficits and inflation reignite. After the completed fourth halving, Bitcoin’s inflation rate is now at 0.85%, significantly lower than the Fed’s ideal target for USD at 2%. Year-to-date, Bitcoin has drastically outpaced both gold and silver at 51% returns.
Lastly, because REITs can diversify their real estate portfolio, they resist market swings and the Fed’s monetary policies regardless of direction.TIPS can adjust their interest payments and principal according to the consumer price index moves for investors looking for the absolute safest inflation hedge available. Although this guarantees the bond’s original value at maturity, TIPS doesn’t gain value as expected from stocks.