According to the mainstream media, the Federal Reserve can reduce inflation to 2% without causing major economic concerns. Chairman of the Federal Open Market Committee Jerome Powell expressed optimism that the economy would escape a recession after the FOMC’s February meeting. But in an interview with Liz Claman of Fox Business, Peter Schiff argued that the Fed will not be able to overcome inflation or achieve a soft landing. The imminent economic slump, he said, will add fuel to the inflationary fire.

Andrew Brenner, head of worldwide Fixed income at Natalliance, joined Peter and Liz. He agreed with the conventional wisdom that the Fed is giving up the fight against inflation. In fact, he predicted that this would be the final rate hike. According to Brenner, Powell can stop raising interest rates. Markets will do the rest of the work for him since they do not think he will tighten anymore.

Even though inflation is declining, Peter predicted that this might be the last rate increase.

Inflation is going to get much worse.”

Peter said he heard a lot of economic ignorance coming out of Powell’s mouth, especially when it comes to inflation. He noted that Powell said the Fed welcomed “disinflation.”

That disinflation is transitory. Maybe he doesn’t realize that yet, but it is.”

Peter claims he overheard numerous examples of Powell’s uttering economic inanity, particularly about inflation. He referred to Powell’s statement that “disinflation” was what the Fed actually hoped for.

“That disinflation is transitory. Maybe he doesn’t realize that yet, but it is.”

Inflation, Powell added, is the result of inflated consumer expectations.

“He’s wrong. Expectations don’t cause inflation. Neither do wages and prices. He said he was worried that maybe a wage-price spiral could develop and that’s why the Fed wants to make sure it doesn’t happen. The wage-price spiral was a fiction invented by Keynesians. Inflation is caused by the government. It is caused by the Federal Reserve printing money and then Congress spending money. That’s it. And spending is going up.”

As a matter of fact, Powell advocated for a debt ceiling increase to allow for even more government spending.

“Ultimately, the Fed is going to monetize that debt, and we’ve only seen the beginning of inflation. In fact, Powell said inflation is creating misery for families. It’s the government that is creating that misery — and the Fed — because they’re the ones creating the inflation.”

Peter observed that the Federal Reserve has decreased the rate at which it is increasing interest rates. It’s not quite enough even if interest rates are raised by another two or three quarters of a percentage point. He added that the effects of the new, higher rates on consumer actions should be considered.

“Which is pretty much nothing. Credit card debt is at an all-time high. Savings are at an all-time low. So, the higher interest rates have not stopped spending and encouraged saving, which is exactly what has to happen to bring down inflation.”

Government spending, meanwhile, remains in the billions each and every month.

According to Peter, Powell is mistaken once again if he thinks an economic slowdown will reduce inflation.

“That’s actually going to fuel the inflation fire. The real risk is that we end up with a financial crisis and a much more severe recession than the Fed recognizes. And then the Fed tries to prop up the economy to try to stimulate, or combat the financial crisis by creating even more inflation.”