Peter Schiff recently appeared on Fox Digital and poured a bucket of cold water on those who believe the Federal Reserve is winning the inflation fight. In fact, the Fed isn’t making any progress at all.

Peter started the interview by noting that the Bureau of Labor Statistics (BLS) has revised the nonfarm payroll numbers down for all seven months this year.

If we’ve done something seven times in a row, it doesn’t seem very random. Because if these were random numbers, sometimes they’d be too high, sometimes they’d be too low. Like, it’s difficult to toss heads seven times in a row. So, if you toss it seven times in a row, maybe the coin is not fair.”

Peter said he thinks the BLS is biased in its assumptions and thinks the labor market is stronger than it actually is.

Obviously, unemployment picked up. So, that’s a sign of weakness. Average hourly earnings — up less than expected, which is problematic because prices continue to rise.”

Peter also noted there was a big spike in spending last month, but a very small gain in incomes.

The way consumers handled that was raiding their savings.”

The savings rate plunged to 3.5%.

In fact, American consumers have blown through nearly all of the excess savings they accumulated during the government pandemic lockdowns. Aggregate savings peaked at $2.1 trillion in August 2021. As of June, the San Francisco Fed estimated that aggregate savings had dropped to $190 billion.

That’s a sign that the economy is weak because consumers need that rainy day fund, right? Because it’s raining. They’re having a hard time.”

And Peter said it also shows the Fed isn’t making any progress in its inflation fight.

Consumers keep spending and reducing their savings in spite of the rate hikes. The rate hikes are supposed to reduce spending and increase savings. That’s how they bring down inflation. But nothing has worked, and so inflation is going to get worse.”

When you boil it all down, this is stagflation.

The economy is weakening, the labor market is weakening, but consumer prices are strengthening.”

Peter said he thinks we’ve bottomed out on headline CPI and noted that we really haven’t seen much of a reduction in core CPI.

So, now we’re bending back up again and the Fed is at five-and-a-half. They’re no closer to getting 2% inflation than when they had rates at zero.”

Meanwhile, federal budget deficits continue to spiral upward. The government is spending more instead of less.

Nothing has worked, and the markets are completely wrong on their benign outlook for future inflation.”

Peter said the “proper response” would be for the Fed to continue to raise rates while the federal government cuts spending. Of course, the Biden administration isn’t going to cut spending. And while you might see another quarter-point rate hike in September, it’s not going to be enough.

We actually need much higher interest rates. The problem is we can’t afford them. So any interest rate high enough to fight inflation is too high for the markets. And in fact, not only does the Fed create a recession. But it creates a financial crisis, and that financial crisis will be considerably worse than the one we had in 2008.”

Article and video cross-posted from Schiff Gold.