Wall Street saw another miserable day on Thursday as all three major indices plummeted shortly after the US Federal Reserve hiked the key interest rate for the fourth time this year, and signaled more in 2019.
The Dow lost about two percent at the closing bell, while both S&P 500 the Nasdaq composite finished around 1.6 percent down. Rising fears of inevitable recession are sending stocks lower. It has been the worst December on Wall Street since the depths of the Great Depression.
Though signs of inflation have been vague so far, it has been strengthening via the soaring prices of stocks and other assets, according to CEO of Euro Pacific Capital and veteran stock broker Peter Schiff, who says that those costs will gradually shift to consumers.
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“Im watching the US economy implode from the beach. Were in a lot of trouble,” Schiff said in a phone interview with MarketWatch.
“This isnt a bear market, were in a house of cards that the Fed built,” the long-term market pundit stressed.
Earlier this month, the Federal Reserve lowered PCE, personal consumption expenditures, and Core inflation estimates for 2019 to 1.9 percent and 2.1 percent respectively.
Also on rt.com Stocks head south after Fed raises rates
According to Schiff, the next crisis will be worse because financial policy makers have essentially swept problems under the carpet. The new economy wont be able to cope with higher interest rates after a decade of easy-money policies, according to him.
“Markets are starting to crack as this debt is getting more expensive to service. We built this gigantic bubble on this unprecedented amount of cheap money and quantitative easing, and now the hangover will be much worse,” he said.
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