Euro Pacific Capital CEO Peter Schiff is sounding the alarm on the Federal Reserve who signaled its ready to take action and potentially cut interest rates if the trade wars continue and impact the economy.
“The markets should not be celebrating the Federal Reserve cutting rates,” he told FOX Business’ Liz Claman on Tuesday.
Schiff, who was one of the first to have predicted that the U.S. central bank would cut rates back in December of 2018, is warning that the U.S. economy is very close to experiencing a severe recession.
“The stock market has become untethered from reality. Investors should look to undervalued non-dollar stocks, bonds, gold and gold mining stocks,” he said on "Countdown to the Closing Bell.”
Schiff added that investors do not understand the strength that China and the emerging markets have against the U.S. in the looming full-blown trade war.
In a monetary policy conference at the Chicago Federal Reserve, Fed Chair Jerome Powell indicated there’s a higher likelihood of a potential rate cut citing the fallout from President Trump’s trade actions against China and Mexico that could potentially threaten the U.S. economy.
“We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective,” Powell said.
The markets are anticipating the Federal Open Market Committee to cut its benchmark rate twice before the end of 2019.