Peter Schiff, a supporter of gold, believes that the US Federal Reserve’s most recent interest rate drop could exacerbate inflation and perhaps a recession. He said that the Fed Reserve was caving in to the market with its most recent 50 basis point interest rate drop. According to Schiff, the recession is made worse by the state of inflation.
In the midst of a 0.5% rate cut, is the Fed ready for a US recession?
In line with market forecasts, the Federal Reserve reduced interest rates by 0.5% for the first time in four years. The market was actually quite excited about this occurrence. The short-, medium-, and long-term effects are still being considered given the Fed’s dovish position.
Notably, Bitcoin had a significant price increase during the course of the previous day, when the interest rate news became available. The price of the coin has increased by 0.2% during the past day to $60,372.50.
Now that the rate decrease was over, markets focused intently on Fed Chair Jerome Powell’s remarks. The Chairman claims that in the event of a performance lapse, the FOMC has prepared measures to manage the economy. Powell stated that more rate hikes or cuts will be carried out as may be necessary, despite the fact that many people are worried about a US recession.
The further steps to avert the US recession panic will be guided by PCE statistics, other market indicators, and US CPI inflation.
Schiff Invests in Gold to Guard Against Inflation
Schiff stated that Bitcoin might not gain from any Fed rate reductions if the economy collapses as many are predicting. As Schiff noted, a return to inflation might have a negative effect on the price of bitcoin. Rising inflation, in his opinion, will make investors less inclined to put money into riskier assets like the flagship cryptocurrency.
Schiff believes that the price of bitcoin may eventually drop to $20,000. The American businessman is attempting to accomplish the same goal this time around—he has always valued gold more highly than bitcoin. Schiff encouraged investors to purchase gold instead of stocks at the conclusion of his X piece, which highlighted the impending recession and inflation.
Schiff has consistently argued that, even in the midst of the US recession, gold is still a solid safe haven. Gold’s haven thesis was confirmed when it recently hit a new all-time high (ATH) of more than $2,586.
