Economist and gold bug Peter Schiff has sounded a note of caution about the Federal Reserve's latest actions, linking the dramatic rate cut to rising gold prices and a weakening US dollar. His warnings of a deeper recession and rising inflation add to concerns about future economic stability. "Game over for the Fed," Schiff stressed.
Peter Schiff Warns Fed Rate Cuts Will Lead to Economic Disaster
Economist and gold bug Peter Schiff commented on social media platform X on Wednesday after the Federal Reserve cut interest rates by 50 basis points. “As expected, the Fed caved to the market and cut rates by 50 basis points,” he wrote, adding:
Not only did this rate cut fail to prevent the already-sluggish economy from entering recession, it also increased inflation, making the recession much worse.
In a follow-up post, he warned: “The Fed’s 50 basis point rate cut not only pushed gold prices to a record high of $2,595, but also sent the US dollar tumbling below 0.84 Swiss francs, a new 13-year low.” The economist stressed:
Even more worrying is the rise in long-term Treasury yields. Game over for the Fed.
Ahead of the Federal Reserve’s decision to cut interest rates, Schiff warned that the Fed was about to make a policy mistake that “will crush the dollar and fuel inflation.” He warned that cutting interest rates would lead to “a return to QE, another repeat of the mistake that will create more debt and send consumer prices soaring.”
“Analysts who say the stock market isn’t pricing in a recession because it’s trading near record highs don’t get it,” Schiff added on Wednesday. “Investors know that a recession means rate cuts and a return to QE, both of which are supposed to be good for stocks. That’s what the market is pricing in.”
What do you think about Peter Schiff's bold warning and the Federal Reserve's recent actions? Let us know in the comments below.
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