Fed Hike Fails to Contain Inflation as Housing Bubble Grows

Peter Schiff, chief of Euro Pacific Asset Management, is warning that the recent Federal Reserve rate hike will not be enough to stop inflation. The Fed's decision to raise its policy rate by 25 basis points was unanimous, with all 12 members voting in favor of the move. However, Schiff argues that this increase is too small and too late to contain rising prices.

According to Schiff, the bond market is experiencing a bear trend, which he believes has years left to run. He notes that interest rates are still historically low relative to the $40 trillion in federal debt. This, combined with a housing bubble that he claims is bigger than 2008, means that the next financial crisis could be different from past ones.

Unlike previous crises, which were often accompanied by bank bailouts, Schiff predicts that the next one will involve a sovereign debt and currency crisis. He points to JP Morgan's recent decision to raise its prime rate to 7% as evidence of this trend. The Dow also experienced a decline of roughly 850 points in response to the Fed's decision.