Is the Fed’s upcoming rate cut a ‘huge mistake’?

If you’re following the markets, you’ll know the Federal Reserve is poised to cut interest rates next week to stimulate a lagging economy. While most crypto traders are jumping for joy at the thought of fresh liquidity entering the system, not everybody’s happy. The upcoming rate cut, according to some, could have a catastrophic effect on the global economy.

A Rate Cut Is ‘Bad Monetary Policy’

Economist, investor, and everybody’s favorite goldbug Peter Schiff did not mince his words, calling a rate cut a “huge mistake” in a post shared on X.

As crypto traders gear up for a potentially bullish period, Schiff warns of serious consequences that will gravely impact the economy.

His commentary is blunt. He points to recent price moves in gold and silver as clear evidence that the rate cut is being telegraphed by the markets. Schiff wrote:

“Silver just traded above $42. Gold is poised to break to a new record high. I think the precious metals are getting ready to melt up. This is an unmistakable market signal that the Fed’s upcoming rate cut is a huge mistake.”

He argues that the decision will set off a string of cuts and a return to aggressive quantitative easing, potentially with “definitive yield curve control.” Schiff claims the U.S. dollar could lose its reserve currency status as confidence in the Fed’s judgment wavers.

Peter Schiff has long pushed the view that overly easy policy will stoke inflation and put the dollar at risk. He believes that today’s environment represents the Fed’s most damaging error yet.