The specter of political interference in the Federal Reserve is rippling through the market, and for ETF investors, the parallels to the 1970s are becoming more and more difficult to ignore.
• What’s next for TIP stock?
While Sen. Elizabeth Warren has accused President Donald Trump of interfering in the Fed, warning that this could have serious implications for the interest rates for mortgages, credit cards and student loans, there is another, more sinister threat to the market that ETF investors should be considering: inflation risk.
Warren referenced former President Richard Nixon’s term in the 1970s, an era of high inflation, unemployment and lower GDP growth.
The parallels to the 1970s and the Nixon administration are not coincidental. The fear among investors today is that the same set of economic problems that resulted in one of the most painful periods of inflation in American economic history could be about to be replayed.
The Nixon Playbook — And How It Applies To The Market Today
The Nixon administration and the economic policies that put in place during that time have a lot to teach about what could go wrong in …
