icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

US Fed ‘unable to delay’ recession any longer – investor Peter Schiff

US Fed ‘unable to delay’ recession any longer – investor Peter Schiff
There is no question the US economy is heading toward recession, according to Peter Schiff, chief global strategist at Euro Pacific Capital. He says it was a “huge mistake” for the Federal Reserve to cut interest rates last month.

“They never should have taken rates to zero in 2008 and held them there for 7 years,” the veteran broker told RT. “Zero interest rates and quantitative easing have created problems in our economy that will take generations to fix. However, the healing will never get underway if the Fed goes right back to zero (which is where they are headed).”

According to Schiff, it’s impossible to build a viable economy on the back of artificially low interest rates. “All it accomplishes it to push up asset prices, creating bubbles and malinvestments that hurt the economy. Relying on low interest rates for growth makes it certain that recessions will ensue when monetary policy tightens.”

Also on rt.com US recession ‘the biggest concern’ amid Washington-Beijing trade conflict, warns Standard Chartered

A sustainable economy can only grow on the foundation of market-set interest rates, says Schiff, who predicted the 2008 financial crash. According to him, “the Fed is not causing the recession; they are just unable to delay it any longer.”

READ MORE: Trump says Fed ‘biggest problem’ for US economy, calls Powell ‘golfer who can’t putt’

For years, the expansion has been fueled by artificially low interest rates, but “the party is finally coming to an end.” Runaway government debt and the Trump tariffs provided the final push to tip us back toward an inevitable recession, Schiff said.

For more stories on economy & finance visit RT's business section

Podcasts