Gold proponent Peter Schiff sees the possibility of the latest Interest rate cut by the US Federal Reserve fueling recession and even inflation. He described the latest interest rate cut of 50-basis-point as the Fed Reserve giving in to the market. Schiff believes that the situation with the inflation makes the recession even worse.
Is The Fed Prepared for a US Recession Amid 0.5% Rate Cut?
For the first time in four years, the Federal Reserve implemented an interest rate cut of 0.5%, aligning with market expectations. The market looked forward to this event with earnest expectation. With the Fed’s dovish stance, the short, medium, and long-term impacts remains on the radar.
Noteworthy, Bitcoin has registered a sizable price surge in the last 24 hours, during which the news of the interest rate went live. The coin is currently trading at $60,372.50, with a 0.2% increase in the last 24 hours.
With the rate cut now out of the way, investors paid keen attention to the speech from Fed Chair Jerome Powell. According to the Chairman, the FOMC has made preparations to handle the economy in the case of performance lapse. While many are concerned about a US recession, Powell said further rate hikes or cuts will be implemented as might necessary.
With US CPI inflation, PCE data and other market indicators will guide next actions to prevent the US recession scare.
Schiff Banks on Gold in Preparation For Inflation
Should the economy tumble as many are projecting, Schiff said Bitcoin might not benefit from any Fed rate cuts. Precisely, any reignition of inflation might negatively impact Bitcoin pric as Schiff pointed out. He believes that rising inflation will diminish investors’ confidence in investing in risk assets like the flagship crypto.
In the long run, Schiff sees Bitcoin price going to as low as $20,000. The American businessmen has always rated gold higher than Bitcoin and this is the same thing he is trying to achieve this time. At the end of his X post highlighting the potential recession and inflation, Schiff advised investors to buy gold instead.
For long, Schiff has maintained his position that gold remain a reliable safe haven amid US recession. Gold recently reached a new all-time high (ATH) of above $2,586, validating his haven thesis
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