Peter Schiff warns of stagflation for US economy

Peter Chef, the chief economist in asset management in Europe, has expressed some criticism of the Federal Reserve and the economy appeared during its appearance on Wednesday on the “Country count”.

Chef’s comments on the offer were not a long period of the conclusion of the Federal Open Markets Committee (FOMC) its last meeting in the afternoon, and chose to maintain the standard interest rate of the central bank at its current level.

The Federal Reserve series, Jerome Powell, later made statements to the media about the decision.

“The biggest ready -to -meal is that Powell mainly admitted that they have no idea of ​​what will happen.”

The Federal Reserve leaves the main interest rate for the session for the fourth consecutive meeting

“They don’t really know what will happen to consumer prices. They do not know what will happen to work,” Chef said. “I don’t even think that their expectations are educated guesses as much as thinking about wishing.”

The standard federal funds in the current range will remain from 4.25 % to 4.5 % after the recent Federal Reserve.

FOMC policymakers also issued a summary of economic expectations, known as the so -called “DOT conspiracy”, which showed that members expect interest rate cuts in 2025, followed by one cut in 2026 and 2027.

Jerome Powell, Chairman of the Federal Board, during a press conference after the Federal Open Market Committee meeting in Washington, DC, November 7, 2024. (Ting Shen / Bloomberg via Getty Images / Getty Images)

They also make PCE to rise to 3 % this year before a decrease to 2.4 % in 2026 and 2.1 % in the following year. The real GDP (GDP) is seen as slowing to 1.4 % in 2025 before growth captures up to 1.6 % next year and 1.8 % in 2027. Unemployment is seen as rising to 4.5 % in 2025 and 2026, before decreasing to 4.4 % in 2027.

Chef said he believed that inflation would be “much higher” than the Federal Reserve expects and that the American economy will be “much weaker.”

He admitted that the Federal Reserve “raised their slightly inflation expectations” in the short term and “their growth expectations”, but added that such changes were not “large enough.”

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According to Chef, the “big problem” of inflation is “all the inflation chickens launched by the Federal Reserve for more than a decade to its home to wander” instead of the recent definitions series in the Trump administration on imports from foreign countries.

“We have a lot of dollars worldwide thanks to the years and years of artificial low interest rates and quantitative alleviation, and more of these dollars will return home with foreigners’ exit from US financial assets, “Chef Chef told Claman.

“You see a global exit from the shares of the United States, from the bonds from us, and all these money will return to the house, which offers prices.”

Chef expects the United States to suffer from recession “with stagnation and much higher enlargement that occurs at the same time, which really complicates the ability to defend to try to do something about any of the problems.”

He also said that low interest rates will not help the American economy, describing them as “the cause.”

“The solution involves the high interest rates,” he said. “Now, I understand that this will be very painful, given the economy we created, built on the basis of cheap money.”

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“This means that stock prices are decreased, and real estate prices have decreased, companies have failed,” he added. “There will be bankruptcy. There will be assumptions. There will be a long stagnation, and perhaps a much worse financial crisis than 2008, but all that should happen because the alternative so is worse.”

Chef predicted that the United States is on the road to “fugitive inflation” that could become “hyperplasia”.

The last FOMC meeting was the fourth time that this year gathered.

FOMC also chose not to change the rate in the previous three meetings in January, March and May.

The Marriner S. Eccles Federal Reserve Building in Washington, DC, June 25, 2024. (Ting Shen / Bloomberg via Getty Images / Getty Images)

In late May, the Personal Consumption Expenditure Index showed 0.1 % per month the month and an increase of 2.1 % on an annual basis in inflation for the month of April.

Eric Rafel contributed to this report.