The Peter Schiff Show Podcast

Fed Dismisses Weak Data to Posture for Another Rate Hike

07 May 2017

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SchiffReport recorded Saturday, May 6 * On Wednesday of this week, the Federal Reserve against a rate hike in May * But based on their official statement, the market assigned a much higher probability * To a rate hike coming in June * In fact, following Friday's slightly better-than-expected Non-Farm Payroll report, the probability of a June rate hike is not near 100% * In other words, the markets are certain that a quart-point hike is coming next month * If the Federal Reserve does raise its rates by a quarter point, that will bring the floor of the official rate finally up to 1% * The ceiling being 1.25%, so presumably the Fed will target a Fed funds rate somewhere between 1 - 1.25% * This is still an exceptionally low interest rate indicating extreme monetary accommodation * Remember, 1% is the absolute low that Alan Greenspan lowered interest rates to in the aftermath of the 2001 recession and the 9/11 terrorist attack * That artificially low interest rate really provided the air for the housing bubble that resulted in the 2008 Financial Crisis * So despite these rate hikes, the Fed monetary policy remains extremely accommodative, * Just not as accommodative as they were before * If you recall, the main reason I was certain that the Fed was not like to deliver these rate hikes * Is because I took the Fed at its word that it was data dependent * And I believed that the Fed would use weak data as an opportunity or an excuse to not raise interest rates * I was wrong about that, because the Federal Reserve has ignored all of the weakening economic data and has raised rates anyway * It has raised them very slowly, but nonetheless, it has raised interest rates despite the fact that all the data they claim to depend on would not support that decision * I thought for 2 reasons the Fed would not want to hike rates * The first be to delay the onset of the next recession * After all, raising rates into a weakening economy it would accelerate the onset of that recession * I thought the Fed would always err on a delay * But apparently, that is not a concern for the Fed * One of the reasons this might be the case is because the Fed is concerned about having some ammunition to fight the next recession, rather than to postpone the onset * Meaning that they want to get interest rates further above zero before the recession officially begins so that once it is here, they have more room to cut rates * Another reason that the Fed has been more willing to raise rates has to do with the action in the U.S. stock market * I thought the Fed would be reluctant to raise rates for fear of how higher rates might impact the stock market * But it seems the stock market has found another prop * It is no longer relying on cheap money; it now also relying on hope and optimism surrounding the election of Donald Trump * And the idea that he is somehow going to "Make America Great Again" * With deregulation, tax cuts and all sorts of economic stimulusOur Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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3ª PARTE | 17 DIC 2025 | EL PARTIDAZO DE COPE

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The Peter Schiff Show Podcast

Fed Dismisses Weak Data to Posture for Another Rate Hike

This episode hasn't been transcribed yet

Other recent transcribed episodes

3ª PARTE | 17 DIC 2025 | EL PARTIDAZO DE COPE

13:00H | 21 DIC 2025 | Fin de Semana

12:00H | 21 DIC 2025 | Fin de Semana

10:00H | 21 DIC 2025 | Fin de Semana

13:00H | 20 DIC 2025 | Fin de Semana

12:00H | 20 DIC 2025 | Fin de Semana

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