All eyes are on the Fed this week, as Americans await news about the latest interest rate hike. Some experts are expecting a much larger hike. Ed Yardeni, the President of Yardeni Research, Inc., told CNBC, “I do think they’re going to come around and conclude that maybe just get it over with, maybe 100 basis points instead of 75 basis points. And then maybe one more hike after that.” Matthew Piepenburg, Commercial Director at Matterhorn Asset Management, believes these hikes are “disingenuous,” telling Kitco News, “I think Powell is seeking inflation. The only reason they’re raising rates today is not to fight inflation. It’s so they’ll have some [reason] to cut [rates] when the real recession becomes an official recession.”
Kitco News/Cornelius Christian
The Fed will ‘inflate away’ U.S. federal debt; ‘real inflation’ is in the double-digits – Matthew Piepenburg
Despite Fed Chairman Jerome Powell’s hawkish remarks at the recent Cato Institute Monetary Conference, the Federal Reserve will be forced to pivot and reduce rates, according to Matthew Piepenburg, Commercial Director at Matterhorn Asset Management. This is largely due to the U.S. government’s excessive public debt.
“We have a 125 percent debt-to-GDP [level], and over $30 trillion in public debt,” he said. “The U.S. government’s bar tab can’t afford rising rates… I don’t see a scenario where we can pay for [it].”
Piepenburg also suggested that if inflation were measured according to 1980 criteria, it would be “closer to 18 or 19 percent.” Since 1980, the composition of goods that the Bureau of Labor Statistics uses to calculate CPI has changed. Official U.S. headline inflation was 8.3 percent in August.
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Business Insider/Brian Evans
The Fed may ‘just get it over with’ by raising rates as much as 100 basis points at the next meeting and then hiking one more time, says market bull Ed Yardeni
The Federal Reserve could defy expectations and raise benchmark rates 100 basis points at the next policy meeting, according to Ed Yardeni.
After the August consumer price index came in hotter than expected, the president and chief investment strategist of Yardeni Research suggested the Fed may decide to frontload its rate hikes to tackle inflation more aggressively.
“It seems to me that they are committed to raising the interest rate significantly at this meeting next week,” Yardeni told CNBC on Friday. “I do think they’re going to come around and conclude that maybe just get it over with, maybe 100 basis points instead of 75 basis points. And then maybe one more hike after that.”
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Fox Business/Breck Dumas
Financial expert: Government-fueled inflation is killing retirements
Stubborn inflation continues to bring pain as it chips away at consumers’ buying power, but the impact could be more far-reaching as the high cost of living upends Americans’ plans for their golden years, one expert warns.
Dr. David Phelps argues in his latest book, “Inflation: The Silent Retirement Killer,” that decades of unchecked government spending coupled with the actions of the Federal Reserve made today’s inflation inevitable, and warns that investors must adjust and prepare for the long haul.
While the Labor Department’s latest consumer price index shows the cost of everyday goods rose 8.3% year-over-year in August, Phelps told FOX Business the actual hit to Americans’ wallets is likely twice that. What’s worse, he says, is that he sees inflation sticking around because, with federal spending run amok, there is little the central bank can do to rein it in.
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