'All Bark and No Bite': Peter Schiff Says Kevin Warsh Chose Inflation
The Federal Reserve held rates steady Wednesday, but the bond market pushed borrowing costs sharply higher, sending the 30-year Treasury yield to its highest level since 2007. Peter Schiff says the selloff exposed the gap between Kevin Warsh’s words and actions. “He can talk the talk, and he talked it again today, but he can’t walk the walk,” Schiff said on his podcast, calling the Fed chair “all bark and no bite.” Three FOMC members dissented, voting for a quarter-point hike. Warsh, who has spent two press conferences vowing to crush inflation, was not among them. Warsh keeps saying inflation is a choice. On Wednesday, Schiff argues, Warsh chose inflation. Warsh Says Rates Did Rise Asked directly why he didn’t hike, Warsh answered that rates did rise, pointing to the jump in Treasury yields since the last meeting. Schiff’s counter is that Warsh can...
The Federal Reserve held rates steady Wednesday, but the bond market pushed borrowing costs sharply higher, sending the 30-year Treasury yield to its highest level since 2007.
Peter Schiff says the selloff exposed the gap between Kevin Warsh’s words and actions. “He can talk the talk, and he talked it again today, but he can’t walk the walk,” Schiff said on his podcast, calling the Fed chair “all bark and no bite.” Three FOMC members dissented, voting for a quarter-point hike.
Warsh, who has spent two press conferences vowing to crush inflation, was not among them.
Warsh keeps saying inflation is a choice.
On Wednesday, Schiff argues, Warsh chose inflation.
Warsh Says Rates Did Rise Asked directly why he didn’t hike, Warsh answered that rates did rise, pointing to the jump in Treasury yields since the last meeting.
Schiff’s counter is that Warsh cannot claim credit for a rate increase imposed by the bond market.
Warsh has two tools, higher rates and a smaller balance sheet, and used neither, hiding instead behind repeated claims that the Fed has no magic wand.
Nobody asked for magic, Schiff said.
They asked him to use the tools he has.
The Market Answered While He Spoke The 30-year Treasury yield broke above 5.20% while Warsh was still taking questions and touched 5.239% Thursday, its highest since 2007.
The 10-year climbed toward 4.7% even as the two-year yield fell, sharply steepening the curve.
Bloomberg Markets Live’s Garfield Reynolds called it "one of the most extraordinary moves for 30-year yields out of a Fed meeting," noting that post-Fed volatility usually occurs in shorter maturities.
Gold was the only major asset that finished the day higher, closing up about $40 near $4,070 while stocks and bonds both sold off.
That surprised traders who assume rising yields are bad for gold.
Schiff says they have it wrong: when yields rise because investors are losing faith in the Fed’s will to fight inflation, that is exactly the reason to buy gold.
Where the Money Is Now Polymarket traders now think there is a 10% chance of a rate cut this year, and a 66% chance of a hike.
In September, a hike is at 52%, and no change at 46%.
The Nasdaq 100 fell more than 3% on the week, Meta Platforms Inc (NASDAQ: META ) dropped nearly 9% after missing earnings.
Schiff, a perpetual gold bug, has been telling listeners to sell Treasurys and buy gold for years.
On Wednesday, the market briefly agreed with him.
The way he tells it, SPDR Gold Shares (NYSE: GLD ) wins either way from here.
If Warsh never hikes, inflation runs and gold is the classic hedge.
If yields keep climbing instead, it means investors are losing faith in the Fed, and that is when they buy gold too.
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