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Peter Schiff warns Fed’s rate cut will lead to economic collapse

GrafaGrafa2024/09/19 02:35
By:Mahathir Bayena

Economist and gold advocate Peter Schiff has raised concerns over the Federal Reserve's recent decision to cut interest rates by 50 basis points, signaling what he believes could spell disaster for the U.S. economy. 

Schiff took to social media to warn that the rate cut would not only push the economy deeper into recession but also fuel inflation, worsening the situation further. 

"It’s game over for the Fed," Schiff emphasised. 

In a series of posts, Schiff argued that the Federal Reserve's move is unlikely to stop the economy from cooling off. 

Instead, he suggested that it would turn up the heat on inflation, intensifying economic problems. 

Schiff also pointed out that the decision triggered significant reactions in key markets. 

He noted, "Not only did the Fed’s 50 basis point rate cut send gold to a record high above $2,595, but it also sent the U.S. dollar sinking below 0.84 Swiss francs, a new 13-year low." 

Schiff has long been critical of the Federal Reserve’s monetary policies, often linking them to rising inflation and a weaker U.S. dollar. 

He warned earlier that the rate cut would lead to a return to quantitative easing (QE), which he believes would pile on more debt and send consumer prices soaring. 

He stated, "The Fed’s policy mistake will crush the dollar and reignite inflation." 

In his commentary, Schiff highlighted the potential disconnect between stock market performance and economic reality. 

"Analysts claiming the stock market isn’t pricing in a recession because it’s trading near record highs still don’t get it. Investors know that a recession means interest rate cuts and a return to QE," he explained. 

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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