Economist Peter Schiff said Fed Chairman Jerome Powell’s decision to take a March rate cut off the table “may actually have increased the likelihood that the Fed will actually implement its first rate cut in March.” Furthermore, Schiff explained: The Fed’s job is to actually cause inflation and pretend to fight it. The economist emphasized, “The Federal Reserve creates inflation so that the federal government can run a large budget deficit and support financial markets.”
Peter Schiff on Fed interest rate cuts and inflation
In a series of posts on the social media platform
The Federal Reserve decided to keep interest rates on hold on Wednesday. Federal Reserve Chairman Jerome Powell also announced that the Federal Open Market Committee (FOMC) will not cut interest rates in March. “I think it is unlikely that the committee will reach a level of confidence at its meeting in March,” Powell said. Commenting on the Fed Chairman’s statement, Schiff said:
By taking a March rate cut off the table, Powell may have actually increased the odds that the Fed will make its first rate cut in March. That’s because now that Powell has pulled the rug out from under the stock market, he may be under pressure to prop it up again.
In another X post, Schiff elaborated: “Powell cited real rents rising more slowly than owner-equivalent rents as a reason for optimism about falling inflation. But he wrongly claimed that the rise in inflation was temporary, completely ignoring actual rents that were rising much faster than owners’ equivalent rents.”
He added, “Powell argued that if inflation falls below 2%, the Fed will have to do something about it.” In other words, despite years of inflation well above 2%, the Fed will not tolerate a year with inflation below 2%. “That’s what an average inflation policy of 2% over time is.”
Schiff further commented: “The Fed has officially let everyone know that the rate hikes are complete, but has reduced expectations about when the rate cuts will begin. “I wonder how long it will take the financial community to realize how severe the recession will be and how much bigger the inflation problem will be,” he said.
Regarding the Fed’s efforts to fight inflation, Schiff wrote Thursday:
In reality, the Fed’s job is to cause inflation, deny its existence, lie about its causes, blame others for the problem, and pretend to fight it. The Federal Reserve creates inflation to help the federal government run large budget deficits and prop up financial markets.
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Source: Bitcoin.com