Peter Schiff Blasts Jerome Powell For Not Seeing The 'Stag' In Stagflation: 'Same Type Of Blindness' That Lead To 'Inflation Is Transitory' Misstatements

Renowned economist Peter Schiff has expressed skepticism over Federal Reserve Chair Jerome Powell’s dismissal of stagflation concerns.

What Happened: In a post on X, formerly Twitter, on Wednesday, Schiff criticized Powell’s inability to recognize the signs of stagflation. He compared this to previous Federal Reserve misstatements, such as underestimating the subprime crisis and inflation rates.

He said, “He sees neither ‘stag’ nor ‘flation.’ This is the same type of blindness that lead to prevision #Fed misstatements like ‘subprime is contained’ and “inflation is transitory.'”

The post came after Powell’s press conference where he downplayed the possibility of stagflation, a situation characterized by slow economic growth and high inflation.

See Also: S&P 500, Nasdaq Set To Open Lower Ahead Of Fed Decision: What’s Dragging Stock Futures?

Why It Matters: Powell’s recent remarks have been focused on reassuring markets about the Federal Reserve’s stance on inflation. Powell emphasized the need for more time for restrictive monetary policies to bring inflation towards the Fed’s 2% goal. He also dismissed fears of rate hikes, stating that it was “unlikely” that the next policy rate move would be a hike.

However, Schiff’s tweet suggests that Powell’s dismissal of stagflation concerns may be a misstep, similar to previous Federal Reserve errors. This criticism comes amidst a cautious stance from the Federal Reserve on returning to the 2% inflation target.

As the debate over inflation and monetary policy continues, the market will be closely watching the Federal Reserve’s next moves ahead of the June policy meeting.

Photo Courtesy: Wikimedia Commons

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