QE4 here we come? Peter Schiff may be right about Fed policy after dovish meeting

On Wednesday, the Federal Reserve completed its two-day Federal Open Market Committee (FOMC) policy meeting. The Eccles Building made several major announcements:

– The benchmark fed funds rate would be left unchanged in the 2.25 percent to 2.50 percent range.
– It plans to raise interest rates just once in 2019 and not at all in 2020.
– The Fed will wind down the runoff of its $4 trillion balance sheet beginning in May and ending in September.
– GDP growth estimate has been cut down from 2.3 percent to 2.1 percent.
– The PCE inflation forecast was reduced from 1.9 percent to 1.8 percent.

So, all this leads to an important question: Is Peter Schiff right again?

While the United States central bank has not said that it will reduce interest rates, the Fed is not bullish on the economy, even citing low inflation, slow economic growth, and multiple disappointing data points for its recent moves.

If you examine the recent CME Group FedWatch tool numbers, a growing number expect interest rates to come down. For instance, there is a 12 percent chance of the target range falling to 2.00 percent to 2.25 percent in June. There is even a three percent chance of the target range sliding to 1.75 percent to 2.00 percent.

A lot of the signs point to another round of quantitative easing, something that Peter Schiff has predicted for the last couple of years. Whether this happens during a downturn or not remains to be seen.

Ryan McMaken of The Mises Institute said it best:

Put simply: the days of quantitative easing are back, and we’re not even in a recession yet.

Some observers might simply respond with “big deal, the economy’s growing, and better yet, the Fed has given us both growth and little inflation.”

But things are not all as pleasant as they seem.

QE4 here we come?