Fed speak: Will Fed Chair Powell point to rate cuts at the September meeting? - Axel Merk

(Kitco News) With expectations that the Federal Reserve will hold rates steady on September 20, the idea of rate cuts could be brought up sooner than many anticipate, according to Axel Merk, President and CIO of Merk Investments, who sees Fed Chair Jerome Powell as having no real strategy.

"A Federal Reserve does not have a strategy. We have a Fed that's sticking to where they are right now, hoping that somehow things will normalize. What ends up happening is the Federal Reserve does nothing," Merk told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.

The problem is that inflation is not linear, Merk explained. Last week, markets digested the latest inflation numbers that showed the consumer price index rising 0.6% in August the biggest monthly gain this year. The annual headline number was at 3.7%, up from 3.2% in July. And as the renewed price pressures were blamed on surging energy prices, core inflation, which excludes energy and food, was up 4.3% year over year, a slowdown from July's 4.7%. The Producer Price Index (PPI) also rose 0.7% last month the sharpest increase in over a year.