Money & Markets - Peter Schiff: 'When Will the Market Wake Up to This Game, This Con?'

October 31, 2019

Article by JT Crowe in Money & Markets

With another Federal Open Market Committee meeting past and the approval of another interest rate cut, all of the pundits are weighing in. And economist Peter Schiff is again wondering when the market is going to wake up to the “con” he says the U.S. economy is.

The Fed voted to cut its benchmark interest rate another 0.25% on Wednesday, down to the 1.5% and 1.75% range. It was the third cut since July and first three cuts since 2008.

The problem most pundits see is that it is highly unusual for the Fed to cut rates while the economy is “the greatest in American history,” if you’re buying what President Donald Trump is selling.

Schiff, a libertarian, is clearly not buying it.

Trump went on to voice his displeasure with the Fed only cutting a quarter-point, but Schiff argues that Fed Chief Jerome Powell himself doesn’t believe the economy is strong or he wouldn’t be cutting rates.

Schiff also asked on his latest podcast why Powell is accommodating the strongest economy in the history of our country, particularly because he said last year the Fed would continue raising rates through 2019.

“And they said this with a straight face,” Schiff said, “and everybody believed them.”

Now, Schiff said, the Fed is trying to “keep rates artificially low to suppress the cost of borrowing to help out all the debtors so they can make payments on their debt, and keep the stock market elevated, to keep real estate prices elevated.”

He went on to say the Fed has restarted quantitative easing but is refusing to call it that because it doesn’t want to admit “the economy needs it.”

“Well, if everything is good, why do we need the emergency monetary policy when everything wasn’t good?” he asked. “When we were trying to get the economy out of a bad place, we did QE. And if it’s now in a good place, why are we doing it again? So, that’s why he wants to deny he’s doing it.

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