Video News/This Week In Focus

(Kitco News) - Ahead of the Federal Reserve's Wednesday decision, three guests told Kitco News over nine days of separate interviews that the central bank cannot afford to raise interest rates, even as the market moved to price a hike as the likely outcome. Their shared argument was that higher rates raise the government's own borrowing costs, and the federal government is the largest borrower of all. Ran Neuner argued the current inflation is a war-driven supply shock rather than an overheating economy, and that rates are the wrong tool for it, though he was not ruling a hike out. Brien Lundin, a four-decade veteran of the gold market, argued a sustained campaign of hikes cannot be financed, with debt service already running above national defense spending. Ron Paul, the 91-year-old former congressman who wrote "End the Fed," argued that debt and malinvestment must eventually be liquidated and there is no painless path to doing so. After Friday's hotter-than-expected inflation reading, the market's implied probability of a September hike rose to 88.7%, according to the CME FedWatch tool, which would mark the first increase since July 2023.