No Alien Invasion And No Rate Hike – Ep. 197

The Peter Schiff Show Podcast

Aliens didn't invade the Earth, and the Federal Reserve didn't raise interest rates If you remember, I was pegging the probability of each at roughly the same True to form, the Federal Reserve did pretty much exactly what I thought they were going to do and not raise interest rates Now I thought they might have tried to lower expectations for the probability in the markets of a December rate hike Even though they didn't say that, that was the effect of their announcement If you look at the dot plots, for example, the FOMC members were looking for rates to be lower for longer Surely, if you look at the reaction to the market, the market does not appear to be worried about a rate hike coming in either November or December, even though the Fed still maintains the narrative that the possibility still exists The Fed reiterated that the case for a rate hike had increased But, they chose not to raise rates despite their narrative Their reason was that they wanted to see more data This is exactly what I said after Yellen's statement at Jackson Hole The media interpreted her statement as a signal that a September rate hike was likely What did I say? I said the Fed didn't say anything about hiking They were speaking about the case for a hike I described it as a scale from, say 0 - 10 If the case were a 3 and then it became a 4, the case had strengthened But if the Fed needs 10, and we're only at 4, they're not going to hike They never came clean about their scale, they simply said that the case for a hike had increased That doesn't mean they were going to raise rates, and that's exactly what happened It's interesting that in all of the prepared remarks and in the following press conference Janet Yellen never once admitted that the economy is weakening In fact, she continues to pretend that everything is great Ironically, one of the questions in the Q&A had to do with Donald Trump's position that the Fed is not raising interest rates for political reasons Which, of course is exactly why they're not raising them If they raise interest rates, everything would collapse, and so would Hillary Clinton's election prospects