Peter Schiff recently appeared on Dan Bongino’s Unfiltered on Fox News to talk about the economy, inflation, the stock market, the Federal Reserve and investing in 2023. Peter said the recession that everybody denies exists is going to get worse, and so is inflation.
Some people in the mainstream seem to think a big stock market rally is in the cards. Peter said the optimism is unfounded.
I don’t think it’s going to be a good year for the stock market. I think there are going to be some stocks that do well. Unfortunately, most Americans don’t own those stocks.”
Peter said the ones that most investors do own are going to go down.
The very popular stocks that a lot of people have crowded into during the bubble - these stocks, even though they’ve come down a lot in 2022, they still have a long way to fall. And I think there’s a lot of risk in 2023, not just in the market, but in the economy.”
Bongino referenced an op-ed in the New York Post by Ken Fisher arguing that the bad news, especially in the job market, is already written into the script and priced into the market. That means we may well have a “summer of love” in the stock market with a healthy rebound. Peter said people are underestimating just how bad the news is going to get.
First of all, a lot of people think inflation is going to come down. It’s not. I think the decline is what’s transitory. I think we’re going to be making new year-over-year highs in inflation before the end of the year.”
Peter has been arguing that a declining dollar and an ultimate Fed pivot away from monetary tightening will mean more inflation down the road, even if we get some relief in the CPI over the next few months. He drove this point home in a recent podcast.
That is the really important point that seems to be lost on everybody. What investors are trying to figure out is ‘has inflation peaked?’ Have we seen peak inflation? Now, I think the answer to that question is no. I don’t think inflation has peaked. Now, it may have peaked for a short period of time. It may take until the second half of 2023 before we get a year-over-year rate of inflation that was higher than the high water mark for 2022. Who knows? Maybe it will take into 2024. But the one thing that I’m certain of is that we’re not going anywhere near 2%. And that is what investors still don’t understand — that the days of low inflation are over, and we’re living in an era of high inflation. That is a complete game-changer for the Fed and the Fed has yet to come to terms with this new reality, nor has the market.”
And during his discussion with Bongino, Peter said the notion the economy is about to rebound is nothing but a fantasy.
The recession that everybody denies exists is actually going to get worse. So, we’re going to have a weaker economy and stronger inflation. The markets are not expecting that, and neither is the Fed.”