Why China’s economic slowdown is unlikely to affect US inflation

Unlimited Co-founder, CEO, and chief investment officer Bob Elliott joins Josh Lipton and Madison Mills on Market Domination after last week’s rate cut to discuss some of the top stories of the day, including concerns about the Chinese economy and rising gold prices, breaking down what investors need to know.

Elliot tells investors the state of China’s economy is “not likely to have a meaningful impact on US inflation numbers ahead; when it comes to growth, the US economy is pretty insulated from Chinese growth and not likely to have much of an impact.”

In regard to the impact on oil prices, Elliot says, “We’re really in this range here on oil (CL=F) where we’re not likely to see meaningfully more elevated oil prices, nor meaningfully lower oil prices ahead. And so, what’s going to really determine what’s going on with the inflation and growth picture in the United States? It’s really going to be about what’s happening with labor. As well as shelter costs and goods prices that are not particularly connected to oil prices, like used and new cars.”

As gold (GC=F) prices reach record highs, Elliot says “The rise in gold prices is really a good indication that the Fed is likely pursuing a policy that’s too accommodative relative to conditions. And, while there’s been a good bid, particularly from US investors in the bond market, what we see is, you know, big global holders of US bonds trying everything they can to lower their allocation to bonds and increase their allocation to gold. And the Fed’s policy here only reinforces that trend.”

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Naomi Buchanan.