Former Federal Reserve Chairman Paul Volcker passed away last week. Volker was appointed by President Jimmy Carter, but served most of his term under President Ronald Reagan. Volker was best-known for fighting inflation with interest rate hikes. At the peak, Volker pushed rates all the way to 20%.
Peter talked about Volcker in a recent podcast, noting that he was credited with slaying the inflation monster that today’s Fed seems happy to resurrect.
We have a trade deal! Maybe. Meanwhile, the Fed wrapped up its last FOMC meeting of the year this week and did nothing. But Powell and Company did give us some indication about what we should expect next year. The week’s news played tug-o-war with gold. In this episode of the Friday Gold Wrap, host Mike Maharrey breaks it all down and says there’s a lot to be skeptical about, both with the trade deal and the rhetoric coming out of the Fed.
The Federal Reserve wrapped up its final Federal Open Market Committee meeting of 2019 on Wednesday doing pretty much what was expected — nothing. But in the processing of doing nothing, the central bank said a lot and managed to out-dove expectations.
After cutting interest rates three times in 2019, the FOMC stood pat during its final meeting of the year, holding the interest rate steady at 1.5%.
On Nov. 18, Peter Schiff appeared on RT Boom Bust to talk stock markets, trade war and Federal Reserve policy. He said that right now the Fed is doing a good job stimulating the bubbles, but ultimately, it’s going to end very poorly.
On the trade war front, there seems to be a lot of conflicting information and continual yo-yoing between pessimism and optimism. The Chinese seem less confident while White House economic advisor Larry Kudlow says a deal is close.
Peter said he thinks China is posturing for negotiations.
The Dow pushed above 28,000 on Friday. The Nasdaq also closed on a record high above 8,500, and the S&P 500 made a new record high of 3,120. This despite some more gloomy economic data that came out during the day. Industrial production dropped more than expected, falling by 0.8 in October. Inventory numbers were also revised down. All of this led the Atlanta Fed to revise its Q4 GDP estimate down to 0.3.
In his most recent podcast, Peter Schiff said that it’s QE and Federal Reserve policy that is driving the stock market, not a great economy. In fact, the Fed is creating all kinds of bubbles. And like all bubbles, they will eventually pop.
Jerome Powell lectured Congress about the national debt last week, calling it unsustainable. The Federal Reserve chairman is concerned. He admitted that with interest rates already close to zero, the central bank has very little room to cut rates in the event of an economic downturn. Peter Schiff appeared on the Claman Countdown, along with Milken Institute economist Bill Lee to talk about Powell’s comments.
Peter said that while Powell is lecturing Congress, it’s really the Fed’s fault.
There was more optimism about a trade deal this week. There was also more pessimism about a trade deal this week. Markets reacted accordingly. But there was some other interesting news out there. Jerome Powell lectured Congress about the national debt and last month’s inflation data came in hotter than expected. Host Mike Maharrey covers these stories and more, and basically ignores the trade war gossip, on this episode of the SchiffGold Friday Gold Wrap podcast.
Fiscal 2020 started just like fiscal 2019 ended – with a massive federal budget deficit. And that has Federal Reserve Chairman Jerome Powell worried. In an ironic bit of political theater, Powell lectured Congress about the spending he helps facilitate.
The budget shortfall last month was 34% higher than the October 2018 deficit, coming in at $134.5 billion, according to the latest Treasury Department report. That starts fiscal 2020 off on track to eclipse a $1 trillion deficit.
As expected, the Federal Reserve cut rates for the third time this year. We’re now down to 1.5%. The Fed hinted that cuts are likely on pause for now. But should we believe it? Was this the end of a mid-cycle adjustment? Or should we expect more moves by the central bank? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down rate cut 3.0 and what it could mean for the precious metals markets.
As expected, the Federal Reserve cut interest rates another 25 basis points on Wednesday.
The mainstream read the post FOMC meeting comments to be relatively hawkish, saying Powell and Company seemed to indicate that future rate cutting is on pause.
Peter Schiff opened up his podcast reminding us that just one year ago, the Fed was raising rates and telling us it would continue to do so through 2019. It also claimed that quantitative tightening was on “autopilot.”