A buildup in inflation pressures was a major reason for the Fed's more hawkish tone. According to the latest data released by the Bureau of Labor and Statistics, the Consumer Price Index (CPI) jumped by 2.8% year over year in May. The central bankers projected inflation will likely run above their 2% target into the near future. Analysts expect the CPI to hit 2.1% this year and run at that level through 2020.
In his latest podcast, Peter Schiff said higher inflation might be a victory for the Federal Reserve, but it will be a big loss for consumers. In fact, we are heading for a no-growth, high-inflation economy.
Peter said he doesn't think he's ever heard a Fed chairman so bullish on the economy. That might not be good news.
"Given the fact that the Fed is a pretty good contrarian indicator as far as being reliable, if Powell is extremely bullish, as bullish as a Fed chairman has ever been, it likely means that the best days of so-called growth are behind us and it is all downhill from here."
While everybody is taking up the Fed's hawkish stance, Peter said he thinks the Fed is actually pretty dovish when it comes to inflation if you read between the lines. In fact, Powell said it was too early to "declare victory" on inflation and he wants to make sure it doesn't drift back down.
"As if victory over inflation is defined by lifting the inflation rate up to 2%. I mean, that's not a victory. Do you think consumers are going to celebrate that?"
In fact, it's not hard to generate inflation. Just print money. The hard part comes when inflation runs out of control and the central bankers have to bring it down. That's real victory - a victory Peter said Powell will never achieve.
- Source, Seeking Alpha
