The Fed’s 25 Basis Points Rate Cut is Another Mistake
The Fed’s 25 Basis Points Rate Cut is Another Mistake
Peter Schiff: 10-30-2025
The Federal Reserve’s recent decision to cut interest rates and, perhaps even more significantly, pause its Quantitative Tightening (QT) program, has sent a clear signal to markets: the Fed is easing up. But is this a prudent response to economic conditions, or a dangerous gamble that will ignite further inflation?
We recently tuned into a detailed discussion with two highly respected voices in the financial world: Peter Schiff, Chief Economist at Europacific Asset Management, and Andy Brener, Global Fixed Income Head at Natal Alliance Securities.
Their analysis unveils a complex picture, with both experts agreeing on a troubling trajectory for the dollar, inflation, and the price of gold.
Unsurprisingly, Peter Schiff, a perennial critic of expansionary monetary policy, didn’t mince words. He lambasted the Fed’s premature halt to rate hikes and their move to cut rates, arguing passionately that inflation remains stubbornly and significantly above target. For Schiff, the central bank is acting as if the battle against inflation is won, while the evidence suggests otherwise.
His core argument is that monetary policy remains far too loose, and the continued “debt monetization” is a root cause of persistent inflation. Schiff points to one stark indicator as undeniable proof of the Fed’s misjudgment: gold trading at a staggering $4,000. This, he asserts, is a clear signal that smart money is losing faith in fiat currencies, particularly the dollar, and bracing for a future of eroding purchasing power.
Brener noted the market’s mixed reactions, including a flattening yield curve and visible dissent within the Federal Open Market Committee (FOMC).
These indicators, he suggests, signal that any potential December rate cut could very well be the last for some time, reflecting the deep ideological divides within the Fed itself regarding the appropriate pace and size of rate adjustments.
He also provided valuable technical insight into the end of QT, explaining the Fed’s strategic shift from rolling off mortgages to acquiring Treasury bills. This move aims to reduce the longer-duration assets on its balance sheet, a subtle but significant change in its operational strategy.
Despite their differing analytical lenses, Schiff and Brener find striking common ground on the ultimate trajectory. Both experts agree that the Fed’s current policies are steering the economy towards more inflation, a weaker dollar, and consequently, rising gold prices.
Schiff, ever the outspoken bear on the dollar, predicts a significant rise in gold as the dollar weakens and inflationary pressures persist.
He forecasts an almost inevitable return to massive Quantitative Easing (QE) from the Fed, forced into action by worsening economic conditions and the inability to tolerate the necessary pain of genuinely tight monetary policy.
The discussion with Peter Schiff and Andy Brener paints a concerning picture for the purchasing power of the dollar and the future of inflation.
While the Fed attempts to navigate a complex economic landscape, these experts suggest its recent actions may carry unforeseen and potentially detrimental consequences. The rising price of gold, particularly the $4,000 mark cited by Schiff, stands as a stark reminder of deep-seated anxieties about monetary policy and economic stability.
Understanding these diverging views and the underlying economic forces at play is crucial for anyone looking to protect their wealth and navigate today’s increasingly volatile financial markets.