Economist Peter Schiff has cautioned that the upcoming rate cuts by the Federal Reserve may not lower borrowing costs, according to a post on X on Monday.

What Happened: Schiff, known for his skepticism towards Bitcoin BTC/USD, stated that mortgage rates have likely already hit their lowest point and are expected to rise.

He added that the Federal Reserve would likely return to quantitative easing (QE) to try and halt this increase.

Schiff warned that such actions would “crush the dollar and reignite #inflation.”

Schiff wrote, “Rate hike, maybe 100 basis points. Plus, announce an expansion of QT,” in response to a user query on what he would do if he had control over the Federal Reserve’s decisions.

The Federal Open Market Committee is scheduled to meet on September 18. While a rate cut is anticipated, the exact size remains uncertain.

See Also: Nasdaq, S&P 500 Futures Sag In Fed Decision Week: What’s Going On

Why It Matters: The Federal Reserve’s upcoming meeting has been a focal point for market participants, with significant debate surrounding the size of the anticipated rate cut.

Sen. Elizabeth Warren (D-Mass.), along with Sen. Sheldon Whitehouse (D-R.I.) and Sen. John Hickenlooper (D-CO), urged the Fed to slash rates by 75 basis points, citing the current federal funds rate at a two-decade high of 5.3%.

Investors are also speculating on the size of the cut, with a slight lean towards a 50-basis-point reduction, according to CME Group’s FedWatch tool, which showed a 65% probability for this outcome as of Monday morning.

Adding to the complexity, former President Donald Trump has expressed that there should be no rate cuts before the 2024 presidential election.

Moreover, some analysts argue that rate cuts may not automatically boost the stock market, as the Federal Reserve’s actions might be more reactive to weakening growth rather than proactive measures to stimulate the economy.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote