schiffgold.com / BY SCHIFFGOLD / NOVEMBER 28, 2016
Peter Schiff recently appeared on CNBC’s “Future’s Now” program to discuss what the Federal Reserve will likely do during a Donald Trump presidency. Peter said he sees a rate hike in December as too little too late given the ineffectual level of interest the economy has seen over the last several years, and because of the accelerated rate of inflation that’s taking place.
While the Fed is likely to raise the nominal funds rates in December, real interest rates will continue to fall because they’re being outpaced by inflation. Also thrown into the mix are other countries’ central banks, which will also likely raise their rates as well.
“Not only are we going to get higher inflation in America, but we’re going to get higher inflation worldwide,” Peter said. “It’s not just the Fed that’s going to be raising rates; it’s other central banks as well. So, on a relative basis, our rates aren’t going to go up if all the other central banks are hiking too.”
In the end, December is likely to be a repeat of last year, when markets tanked after the Fed hiked rates a quarter point.
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