While the CPI numbers came in around expectations in July, the producer price data came in hotter than expected for the seventh straight month, putting a damper on the notion that “transitory” inflation might be cooling.
The July Consumer Price Index (CPI) data came out this week. For the first time, the numbers were in line with expectations, leading many mainstream pundits to declare “transitory” inflation is already starting to cool down. Peter Schiff broke down the report in his podcast. He said inflation is far from cooling off. In fact, when it comes to rising prices, you haven’t seen anything yet.
The markets have been jittery lately. The mainstream remains concerned about inflation – more specifically that the Fed is going to tighten monetary policy sooner rather than later to fight rising prices. But in his podcast, Peter Schiff makes the case that the markets are afraid of the wrong thing. They shouldn’t be worried about the Fed fighting inflation. They should be worried that it won’t.
PBS Frontline recently released a documentary titled “The Power of the Fed.” Peter Schiff watched it and offered his analysis of the show on his podcast. He said the documentary missed the real power of the Fed — the power to destroy.
After hotter than expected CPI data came out for the sixth time this year, Federal Reserve Chairman Jerome Powell spent two days on Capitol Hill trying to convince everybody that there’s no problem. As Peter Schiff put in in a recent podcast, the Fed is betting the farm on “transitory” inflation. It’s really got no other choice.
The markets were looking for signs that the transitory inflation period was coming to an end. They didn’t get it when the June CPI number came in much hotter than expected. In his podcast, Peter Schiff talked about the latest price data and said it reveals the dirty little secret – all of this talk about transitory inflation is a ruse. Even worse, despite what the markets seem to think, there’s nothing the Federal Reserve can do about it.
There has been a growing sentiment in the markets that inflation isn’t transitory and the Fed is going to eventually have to tighten monetary policy to deal with it. The International Monetary Fund fed the narrative last week when Managing Director Kristalina Georgieva warned of a “sustained” inflation rise in the United States. This comes after a June Federal Reserve meeting that many perceived as a turn toward hawkishness. But in his podcast, Peter Schiff said the Fed is like the boy who cried wolf when it comes to fighting inflation and the markets are bracing for the wrong impact.
Despite the addition of a better than expected 850,000 jobs in June, the unemployment rate ticked up to 5.9%, The anticipation was that it would drop to 5.6%. The media spun this as a fantastic jobs report, focusing on the headline number of jobs “created.” Peter Schiff talked about it in his podcast and said it was a weaker report than the headlines would suggest. And the really bad news is unemployment and prices are rising together.
Earlier this week, a federal court threw out an antitrust case against Facebook. The lawsuit filed by the Federal Trade Commission, along with 48 state governors, sought to force Facebook to divest itself of WhatsApp and Instagram, but the court said the FTC failed to prove that Facebook holds monopoly power. In his podcast, Peter Schiff said whatever problems Facebook may present, the only monopolies we should really be afraid of are the government-protected monopolies.
The S&P 500 closed last week at an all-time record high. This is quite a reversal from the previous week. In his podcast, Peter Schiff said there has been a shift in expectations. After the June FOMC meeting, investors were jittery that the Fed was going to tighten monetary policy to fight inflation. Now the thinking seems to be that there is no inflation problem. It really is just transitory. Everything is great because – well – the Fed tells us so!
