Federal Reserve Chairman Jerome Powell says that it is “very premature” to think about pausing rate hikes. “We have a ways to go,” he stressed. However, economist Peter Schiff warned that “Planned rate hikes and QT will only succeed in crashing the economy, not bringing down inflation.”
Fed Chair Powell Says ‘Very Premature’ to Talk About Pausing Interest Rate Hikes
Fed Chairman Jerome Powell clarified during a news conference on the central bank’s economic outlook Wednesday that the Fed is not thinking about pausing its rate hikes. The conference followed the Federal Open Market Committee (FOMC) meeting where the U.S. central bank decided to raise interest rates another 0.75 percentage point — the fourth consecutive time this year.
Powell said, “The FOMC raised our policy interest rate by 75 basis points and we continue to anticipate that ongoing increases will be appropriate,” adding:
My view is that it’s premature to talk or think about stopping rate rises. We still have some way to go.
The Fed chairman also noted that “the ultimate level of interest rates will be higher than previously expected” and the chances of a soft landing have narrowed.
Commenting on Powell indicating that a Fed pivot is not going to happen anytime soon, economist and gold bug Peter Schiff tweeted: “Powell just threw cold water on the idea of a pause in interest rate hikes, causing an immediate, and sharp sell-off in financial markets. The sell-off will likely continue until Powell ‘clarifies’ his remarks to prevent the stock and bond markets from crashing to new lows.”
A follow-up tweet from him said:
Powell said he’d prefer to over-tighten to beat inflation as it will be easy for the Fed to use its tools to stimulate the economy if it weakens too much. Powell doesn’t get it. QT and rate increases planned will only bring down the economy.
Schiff recently warned the U.S. that it would crash. He further said the Fed’s action could lead to a massive financial crisis and a severe recession.
Economists warn of severe recession in the United States as the Federal Reserve raises interest rates to counter inflation. Recent surveys show that 98% percent of American chief executives have prepared for the possibility of a recession. Jim Rogers, a well-known investor expects that the next recession will be one of the most severe in his life. Rich Dad Poor Dad author Robert Kiyosaki said that the Federal Reserve’s continued rate hikes will crash the U.S. economy.
What do you think about Fed Chair Powell’s comments and Peter Schiff’s warning? Please leave your comments below.
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