Peter Schiff: The Fed Did Not Trigger a Recession Because It Surrendered When Banks Began to Fail

Peter Schiff stated that Powell boasts about the Fed winning the inflation war and not triggering a recession, but the real reason is that the Fed had surrendered when banks began to fail. Schiff pointed out that inflation never truly disappeared; it simply slowed down before the next wave of increases. After the failures of Silicon Valley Bank and Signature Bank in 2023, the Fed paused interest rate hikes and shifted focus to stabilizing the banking sector. Funds shifted from anti-inflation policies to financial stability, benefiting bank stocks and causing bond yields to decline. Traditional macro trading strategies faced pressure, and the narrative of "Fed put options" was repriced. By July 2026, the U.S. inflation rate is expected to be around 3.5%, above the Fed's 2% target, but economists note that the current inflation stems from supply shocks (Iran war, tariffs), not overheating demand.
Source: Public Information