Brace for Major Turbulence as Markets Eye Presidential Showdown

In the aftermath of another powerful hurricane that tore through Florida, political and economic storm clouds may also be gathering.

Despite recent strength in the U.S. dollar versus other fiat currencies, inflation pressures continue to take a toll on Americans’ personal finances.

On Thursday, Consumer Price Index data for September came in slightly hotter than expected. The core CPI rose by 0.3%, translating into an annualized rate of 3.1%.

That interrupts a months-long trend of officially declared progress on inflation by the Federal Reserve. The Fed is still likely to cut its benchmark interest rate again next month, though at the risk of contributing more upside momentum to inflation.

Soaring costs for shelter remain one of the biggest drivers of inflation. Millions of Floridians now face the prospect of having to make expensive repairs on homes or replace them entirely. And the multi-billion dollar hit to the insurance industry could translate into higher premiums for homeowners not just in Florida but in every location that has the risk of being devasted by a hurricane, tornado, or other weather-related events.

Prices for crude oil and other commodities have been rebounding in recent weeks. And although gold has come off its record high from last month, the market has bounced back both on Thursday and again here today.

As of this Friday recording, the monetary metal is essentially flat for the week now, bringing spot prices to $2,668 an ounce. Silver stands at $31.78 an ounce as prices this week retreat 1.9%. Platinum is off 0.9% to come in at $997. And finally, palladium is posting a nice weekly gain of 5.1% to trade at $1,102 per ounce.

Market volatility could increase in the days immediately before and after next month’s election. The race for President remains extremely close, with former President Donald Trump gaining momentum in recent days in critical swing states.

Also extremely close, but given much less attention in the media, are the races for control of the U.S. Senate and House of Representatives. Polling suggests the Senate could flip to Republican control but with a majority of perhaps just a single seat. The House, meanwhile, is totally up for grabs. Neither party is likely to be able to implement any major legislative agenda items.

If Trump pulls off one of the greatest political comebacks in American history and returns to the White House, he will face intense opposition from Democrats as well as some anti-Trump Republicans who had voted to impeach him during his first term.

Some political observers worry the election will be so close that it will continue to be fought out in the courts and on the streets for weeks after Election Day. The process has already been marred by a perceived coup within the Democrat party to oust Joe Biden and two assassination attempts made against Trump.

Advocates of free and fair elections can only hope that there are no shenanigans involved in the casting, counting, and certifying of votes.

In any event, the country will remain deeply divided with gridlock likely to rule in Washington. That means there will be no real change in the trajectory of federal spending and borrowing.

Investors would be wise to prepare their portfolios accordingly by owning assets that can protect them from ongoing currency debasement.

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