The Fed Chair Just Admitted Inflation Is a Tax… And He’s About to Raise It

by Peter Schiff
on July 15, 2026

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Peter Schiff argues that the Federal Reserve has already lost its fight against inflation, and that the new Fed chair’s rhetoric about bringing prices back under control is not backed by any real plan. Speaking after Kevin Warsh’s first congressional testimony as Fed chairman, Schiff contends that inflation is effectively a tax used to finance government spending, and that gold and other hard assets remain a hedge against it.

According to Peter Schiff, the June inflation report looked better on the surface, with headline CPI falling to 3.5% year over year and core inflation at 2.6%. However, he notes that the decline was driven largely by a roughly 30% drop in oil prices tied to a temporary Iran ceasefire, and that oil has since rebounded about 20% in July. He also points out that official government measures capture only part of the price increases Americans experience.

Peter Schiff explains why he believes the 2% inflation target is a flawed policy tool. He argues the Fed invented the target, that it was originally meant as a ceiling rather than a goal, and that the Fed’s “inflation averaging” approach was abandoned as soon as it became inconvenient. In his view, the real problem is that inflation is an expansion of money and credit, and that Congress’s deficit spending, monetized by the Fed, is its root cause.

Peter Schiff also warns about the AI spending boom, arguing that hyperscalers are borrowing heavily to buy rapidly depreciating equipment in an arms race that may never generate adequate returns. He predicts that once customers run out of money and credit, the bond market could break.

Key takeaways

Peter Schiff says the Fed has already lost the inflation battle, with inflation above its 2% target for roughly six years.
June’s drop in CPI was driven mainly by falling oil prices, which have since rebounded about 20% in July.
Peter Schiff argues inflation is a tax that funds government deficits, created by both Congress and the Fed.
He contends the 2% target was a ceiling the Fed later turned into a justification for higher inflation.
Peter Schiff warns AI hyperscalers’ spending may be a disaster, with heavy debt financing and rapidly obsolete hardware.
He believes inflation supports gold as a hedge, and that bond market stress could worsen.

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In 1914 the Fed ran on 40 people and no computers. Today it takes 23,000. Fire them all and let AI do it… it can’t do any worse.
Tonight’s episode is sponsored by Rockwell Automation. Download their 11th Annual State of Smart Manufacturing Report at
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Kevin Warsh delivered his first congressional testimony as Fed Chair, and Peter Schiff breaks down a hearing where everyone discussed inflation while misdefining the term and ignoring their own role in causing it. June CPI came in at -0.4% versus the expected -0.1%, dropping year-over-year inflation to 3.5% — but the entire decline came from a temporary oil price drop that is already reversing as the Iran war reignites and oil climbs back 20% in July. Bond yields tell the real story: the 30-year is back near 5.1% and the 10-year near 4.6%, erasing nearly the entire post-CPI rally.
Schiff’s biggest revelation from the hearing: the Fed employs 23,000 people to do a job that required just 40 when it opened in 1914 — with no computers — and argues the entire institution could be replaced by a single AI or abolished outright. He dismantles Warsh’s claim of “regime change” at the Fed as being as fake as regime change in Iran, exposes the redefinition of “price stability” to mean prices that rise just slowly enough that people stop complaining, and shows how the 2% target was always a lie invented to justify inflation. He covers Warsh admitting inflation is a tax while planning to keep levying it, the court throwing out Trump’s self-negotiated IRS settlement that granted his family immunity, and the AI CapEx bubble turning tech’s biggest cash generators into massive borrowers that will break the bond market.
Chapters:
00:00 AI Spending Arms Race
01:08 Markets Brace for CPI
06:07 CPI Surprise and Gold Whipsaw
07:34 Oil Driven Inflation Mirage
11:40 What Inflation Really Means
14:11 Congress and Fed Share Blame
17:58 Fed Headcount Shock
22:32 Two Percent Target Myth
27:05 Regime Change and Price Stability
33:40 Day One Recap Continues
34:09 Grow My X Account
35:13 Congress Inflation Theater
36:06 Trump Grift Claims
37:30 IRS Settlement Outrage
39:51 Rates Versus Balance Sheet
41:08 Who Wins Low Rates
43:46 Fed And Black Workers
49:09 AI Bubble Warning
51:15 Hyperscalers Debt Spiral
55:38 Bond Market Breaking Point
58:16 Strategy Stock Dilution
01:00:30 Bitcoin Levels And Regrets
01:01:30 Subscribe And Sign Off
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