There is no question the US economy is heading toward recession, according to Peter Schiff, chief global strategist at Euro Pacific Capital. He says it was a “huge mistake” for the Federal Reserve to cut interest rates last month.

“They never should have taken rates to zero in 2008 and held them there for 7 years,” the veteran broker told RT. “Zero interest rates and quantitative easing have created problems in our economy that will take generations to fix. However, the healing will never get underway if the Fed goes right back to zero (which is where they are headed).”

According to Schiff, it’s impossible to build a viable economy on the back of artificially low interest rates. “All it accomplishes it to push up asset prices, creating bubbles and malinvestments that hurt the economy. Relying on low interest rates for growth makes it certain that recessions will ensue when monetary policy tightens.”

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A sustainable economy can only grow on the foundation of market-set interest rates, says Schiff, who predicted the 2008 financial crash. According to him, “the Fed is not causing the recession; they are just unable to delay it any longer.”

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For years, the expansion has been fueled by artificially low interest rates, but “the party is finally coming to an end.” Runaway government debt and the Trump tariffs provided the final push to tip us back toward an inevitable recession, Schiff said.

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