Peter Schiffa famous economist and sworn enemy Bitcoin, Criticized the role Federal Reserve Managing inflation and promoting a return to the gold standard (a monetary system in which the value of a currency is tied to gold). His comments came as the Nobel laureate called for interest rate cuts. Paul Krugman.
what happened
Schiff talked about the current inflation situation and the role of the Federal Reserve. He suggested that the solution is to abolish the Federal Reserve and return to the gold standard.
“#Powell warned Congress that eliminating the #Fed creates the risk of future high inflation. But inflation has been much higher since the Fed was created than before. The point is not just to eliminate the Fed, but to return to the #gold standard. We don’t want to give Congress a printer,” Schiff wrote.On the other hand, Nobel Prize winner Paul Krugman suggested that the Fed should consider a rate cut at its next meeting. “A truly data-dependent Fed should cut rates at its next meeting,” Krugman wrote on X.
He pointed to the Cleveland Fed’s immediate forecast, which showed the U.S. core personal consumer price index (PCE) at 2.4% in June, well below the Fed’s forecast for the end of 2024.
Because it matters
U.S. personal consumption expenditures (PCE) slowed more than expected in June, suggesting progress toward the Fed’s 2% target. Rate cuts imminent.
Last month, the average increase in a basket of goods and services measured by the Bureau of Labor Statistics was 3% in June 2023, slightly lower than the 3.1% economists had forecast. The June report marked the third consecutive decline in inflation, a trend not seen since May 2023.
However, some experts have expressed doubts about the possibility of a rate cut based on inflation data. Bruce PutnamFormer CME chief economist says Fed There may not be a rate cut Based on lower inflation data.
Still, a slew of economists, including Krugman, expect the Fed to start cutting rates soon after the latest weaker-than-expected inflation report. Joe Biden The White House press release highlighted the positive developments, saying the report showed Significant progress in fighting inflation.
In addition, the Federal Reserve Board Lisa Cook Emphasizes that the Fed is ready to respond quickly to large changes in the unemployment rate, highlighting the Fed’s vigilance on the unemployment rate Economic indicator monitoring