Moneywise
5 min read
Moneywise and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
For much of last year, President Donald Trump promised “extraordinary” economic benefits from his policies and “the brightest economic future the world has ever seen” for the country. But just months into his second term, the administration is asking Americans to brace for an economic dip instead.
-
Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
-
BlackRock CEO Larry Fink has an important message for the next wave of American retirees — here's how he says you can best weather the US retirement crisis
-
Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10)
In a recent interview on CNBC’s Squawk Box, Treasury Secretary Scott Bessent warned that the ongoing efforts to cut back government spending would negatively impact the economy. “The market and the economy have become hooked, become addicted, to excessive government spending and there’s going to be a detox period,” he said.
At the end of 2024, government expenditures as a percentage of gross domestic product was 34%.
However, despite the efforts of Elon Musk to cut costs via the so-called Department of Government Efficiency, there is little evidence that government spending has been reigned in. The federal budget deficit hit $1.3 trillion in March — 15% higher than the same time last fiscal year.
While federal government revenues have risen 3% year-over-year last month, total spending increased by 7%. All told, the government is still spending a huge amount of money.
Meanwhile, tariff-driven uncertainty has caused the stock market to record the most volatile week ever during the second week of April. Plus, JPMorgan & Chase raised the odds of a recession from 40% to 60% earlier this month.
Such drops suggest that the only thing this “detox” is eliminating is economic optimism. Here are three ways you can prepare your portfolio for the ongoing fallout.
In times of uncertainty and volatility, investors often consider gold to be a safe haven. Amid the recent market turmoil, gold has been regaining steam over the last few months, trading above $3,000 per ounce.
With more uncertainty looming, JPMorgan predicts an ounce of gold could reach an average price of $3,675 by the end of 2025, and $4,000 by the second quarter of 2026.
Adding a little gold exposure to your portfolio could help insulate your wealth.
