Peter Schiff: Rate Cuts Will Make Inflation Worse

In his latest podcast, Peter goes through the just-released August consumer price data and uses the report as a springboard to explain why the markets are misreading the Fed and why ordinary Americans are likely to pay the price. He connects the dots between an understated CPI (Consumer Price Index), the rally in stocks tied to hopes for rate cuts, and why those cuts would be bearish for bonds, inflationary for the economy, and ultimately harsher on workers than many realize.

He opens by framing the CPI release as the last obstacle to the market’s expectation of imminent cuts and why the number mattered so much to traders and policymakers alike:

The reason that it’s been so highly anticipated is because everybody is now betting on rate cuts starting next week and a benign CPI report was the last obstacle. I mean, maybe if this thing came out way hotter than expected, somehow it may have rained on the rate cut parade. So everybody was anticipating eagerly this release just to make sure that the rate cut train wasn’t going to get derailed. And we got the number and it actually was slightly worse than expected, but not enough worse to rain on the parade.