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CNBC: 'Impotent' Fed Policy Will Fail to Contain 1970s-type Inflation, Investor Peter Boockvar Predicts

June 10, 2021
Image for CNBC: 'Impotent' Fed Policy Will Fail to Contain 1970s-type Inflation, Investor Peter Boockvar Predicts

Article by Stephanie Landsman in CNBC financial

Most people want to forget this part of the 1970s.

But inflation is back, and investor Peter Boockvar predicts it will be the most widespread in decades.

“Monetary policy ... is right now impotent in its ability to stimulate economic activity,” the Bleakley Advisory Group chief investment officer told CNBC’s “Trading Nation” on Wednesday.

Boockvar warns the issue is particularly evident in the housing market, which is the most sensitive to changes in rates.

“We are at a point where very low interest rates are no longer stimulative to the housing market,” he said. “On the purchase side, we know the dearth of inventories and sticker-shock price increases are slowing the pace of transactions.”

“The Fed knows how to tackle it,” he said. “It’s just a question of whether they have the guts to do so.”

Boockvar doubts the Fed will end quantitative easing or hike interest rates sooner than Wall Street anticipates because of the likely fallout on the stock market and economy.

“I’m in the camp that it [inflation] lasts longer than others think,” said Boockvar, who suggests higher prices will hit almost every corner of the economy. Once businesses hike prices, he warns, they don’t recede at a flick of a switch.

Due to inflation pressures, he anticipates ......

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