Peter Schiff, economist and global strategist at Euro Pacific Asset Management, said that the United States’ ‘inflation is very high and very high’.
In an X article on July 29, Schiff said that the Federal Reserve will not destroy inflation with an increase of 25- or 50-basis-points. Basically, he said that a 0.25% to 0.50% increase in the Fed’s interest rate from 3.50% to 3.75% would still be supportive of inflation.
“Inflation is very high and going very high.” Even if the Fed raises the federal funds by 25 or 50 points today, it is too little, too late to change, because the rates will remain good, “Schiff. lighting fixtures.
The expert said that the Fed should reduce its interest rate and reduce the money supply to stop inflation. Additionally, the US M2 Money Supply continues to expand, hitting a new high of $23.29 trillion in July, according to the official. data.
In addition, the Fed has already warned that a AI Growth has led to inflation, according to Finbold report. As such, Schiff concluded that the Fed would need to reduce interest rates and reduce its money supply.
“The Fed should also reduce interest rates and maintain its balance sheet,” he said.
Schiff warns against trying to fight inflation
Meanwhile, Schiff stressed that the biggest problem with trying to fight inflation with the Fed would be the damage to the market.
“Any further attempt to trigger inflation will crush markets and the economy, forcing the Fed to adjust,” he said. he said.
At the time of reporting, traders put the probability of zero Fed rate cuts in 2026 at 87.6%, according to metrics from Polimamarket. On the other hand, Polimamarket traders show 77% chance that the Fed will raise interest rates this year.
Therefore, Schiff believes that the Fed is striking a balance between inflation control and the risk of disrupting financial markets and economic growth.
