The Federal Reserve May Secretly Want a Bear Market That Helps Topple Trump: Pro
Despite its independence, the Federal Reserve may quietly want a bear market that takes down a president that loves tweeting about the stock market.
Peter Schiff, CEO of Euro Pacific Capital, told TheStreet the "[Janet] Yellen put" in the markets could expire under President Trump. "I don't know if the Fed has much love for Trump," he said, adding that the Fed had the markets' back during the Obama Administration.
"Maybe the Fed would be happy to see a bear market that could be blamed on Trump." Schiff thinks the markets could easily correct 20%.
One black swan event Schiff sees is the notion of investors abandoning the euphoria over Trump's presidency, which helped fuel the stock market rally this year.
"We've had a huge move up since the election of Trump even though prior to the election the expectation was if Trump won it [would be a disaster for markets]," he said.
When asked if the two straight quarters of double-digit earnings growth has sparked the rally in stocks this year, as opposed to solely Trump, Schiff pointed to earnings headwinds in the retail sector.
TheStreet Recommends
The S&P 500 is up 10.5% since the start of the year.
Watch the full interview with Peter Schiff:
Don't miss these top stories on TheStreet:
- Here Are 3 Things to Do After a $750 Million Powerball Win
- Hurricane Harvey Could Send Oil Prices to $50 but Don't Hold Your Breath
- Amazon Just Revealed How It's Planning to Destroy All Grocery Stores
- Apple's Newest Products That Will Pummel Your Wallet Are About to Be Revealed
- Hurricane Harvey Isn't the Bruising Storm That Wall Street Hates: Market Recon
