Inflation Poses A Threat To U.S. Portfolios, Both From Overseas And Within The U.S.

Monday, February 14, 2011 07:28
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Inflation Poses A Threat To U.S. Portfolios, Both From Overseas And Within The U.S.

Tags: inflation | U.S. economy

Over-heated growth rates in major developing nations are forcing interest rates higher and sending stock values on a downward trajectory.

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While inflation remains low within our borders, the economies of countries such as China and Brazil are growing so fast that markets already are feeling the pinch from rising interest rates.


As the value of overseas stocks begins to recede, that will affect U.S. investors in two ways: It will erode the value of the emerging-markets investments in their portfolios, and it will affect the value of U.S. companies that depend on profits from overseas operations, according to this ABC News report.


In the meantime, there are some signs that inflation may begin to rear its head in the United States as well, although perhaps not any time soon. Some analysts predict the Federal Reserve’s easy money policy will spike prices and set off inflation domestically, MarketWatch says. Rising rental rates may be an early sign, as well, according to this CNBC story.

 

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