Peter Schiff says Fed has already lost to inflation, chose gold over bitcoin

Peter Schiff said the Federal Reserve has already lost the fight against inflation and that continued interest-rate increases could put strong downward pressure on bitcoin and the crypto market.

Bitcoin Magazine reported on Sept. 16 that Schiff, in a discussion with Grace Remington and Sean Hagan, described bond-market instability, rising U.S. Treasury yields, weakening dollar purchasing power and increased central-bank gold buying as one connected trend.

Schiff said the bond market did not suddenly wobble recently, but had already structurally collapsed in 2020, and that what followed was a “slow rewind.” Asked how long the bond bear market could last, he replied that structural pressure matters more than short-term fluctuations. He said cutting spending and raising interest rates further would be needed to actually bring prices down.

He said such prescriptions would inevitably come with a recession, but that policymakers and politicians cannot accept it. On the possibility of additional Fed rate hikes, he said they could surprise markets but would be unlikely to restore real trust. Schiff called it a “cosmetic hike” and said tightening not backed by credibility would be unlikely to break inflation expectations.