Sunday, January 3, 2016

Fed is playing a "dangerous" game: Schiff

The Fed funds futures are now pricing in a nearly 70 percent chance of a December rate hike, but one market pundit insists it's not going to happen.

On CNBC's "Fast Money," longtime Fed critic Peter Schiff said Janet Yellen is doing nothing more than kicking the can down the road. He spoke after the release Wednesday of the minutes from the Fed's October meeting. The minutes signaled hawkish sentiment for a rate hike next month.

"According to the minutes, a rate hike has been a possibility all year long and it hasn't happened," Schiff said. The statement put a particular emphasis on economic data between now and the next meeting. "I don't see how that's any different than anything they've said all year round and how people could read those minutes and jump to the conclusion that a rate hike is a lock."

Instead, Schiff believes that the Fed is simply suggesting it will hike because Yellen does not want to admit that the "economy is decelerating." The contrarian pointed to weak earnings from major retailers as just one indication of an economic slowdown.
- Source, CNBC