Peter Schiff Warns Investors Taking Refuge From Stocks In Money Markets: 'Inflation Is A Real Risk'

Renowned economist Peter Schiff cautions investors seeking refuge in money markets from stock volatility, highlighting the lurking inflation threat that could erode purchasing power significantly.

What Happened: On Monday, Schiff shared his insights on Twitter, warning investors about the hidden risk of inflation in money markets. He contended that even though money markets offer a seemingly risk-free 5% return, the actual risk lies in the potential loss of 10%-20% in purchasing power annually due to inflation.

The economist’s warning came amidst turbulent times for the bond market. The Federal Reserve’s commitment to higher interest rates, coupled with fears of a government shutdown, have led to a spike in Treasury bond yields.

See Also: Fed Holds But Signals Hawkish Path Ahead, Treasury Yields Rise: The Week In The Markets

Why It Matters: Thus, Schiff’s latest tweet adds another layer to the ongoing debate about the potential impacts of inflation on investor portfolios and emphasizes the need for investors to consider all risks before making decisions.

The Federal Reserve's decision to stick with higher interest rates has triggered a surge in yields across all periods of maturity, according to a recent report.

Moreover, Moody's warning about potential credit implications in case of a government shutdown has added more uncertainty to the bond market.

Schiff has previously blamed these rising bond yields and energy prices on Bidenomics and warned and warned that these trends might continue.

Photo Courtesy: Wikimedia Commons

Read Next: Invest in top US properties and earn rental income, benefiting from property appreciation and the booming real estate market thanks to this Bezos-backed startup that let's you become a landlord with just $100.

Market News and Data brought to you by Benzinga APIs
Posted In: EquitiesNewsBondsEconomicsMarketsbondsBonds Interest RatesCPIInflationInterest RatesMoody'sPeter Schiffstocks
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!