Title: Rate-Hike Odds Went From 48% to 88% in One Month | This Week Show: Kitco NEWS — "This Week" weekly recap Host: Jeremy Szafron Guests: three clips from unnamed guests (not named in the transcript) + Ron Paul (named) Date: 2026-09-13 URL: https://youtu.be/qzQSh-zsz0Q Length: 6:24 Note: YouTube auto-transcript; fillers (um/uh/you know) and stutters removed; wording otherwise verbatim. Auto-transcript garbles kept as spoken and mapped here: "Jeremy Siegel" 00:19 = host Jeremy Szafron (he signs off correctly at 06:08); "Bassant" = Treasury Secretary Scott Bessent; "Kiko News" = Kitco News. "88. / 7%" is split across the 05:28 / 05:48 cues (88.7%).
00:00 All right, nine guests, three days, same chair. All three of them told me that the Federal Reserve cannot raise interest rates. The Fed meeting is, of course, Wednesday coming up, and the market says that there's now an 88.7% chance it does. It would be the first, rather, increase since July of 2023.
00:19 And, of course, Wednesday we find out. All right, welcome back. I'm Jeremy Siegel. Now, before the arguments, here's what all three are pointing at. Now, when the Fed raises rates, it doesn't just cost you more on a card or a loan, it costs the government more on its own debt. And the government is the biggest borrower that there is.
00:37 So, that's the case, and here's who made it. Now, 8 days ago, the market had this at roughly a coin flip. >> I don't think they're going to raise. I think that Kevin Warsh has a job to do. >> And he wasn't hedging. He said that the market was wrong, and that the real reasons were much smaller. Here's why.
00:57 >> If you're going to raise interest rates because of high oil prices, you're not going to stop the inflation, because the inflation is because of the high oil prices. It's not because of the oil, because the economy's overheating. So, you're using the wrong tool to solve the wrong problem, which is why I don't believe we're going to get a rate hike.
01:15 >> All right, so inflation came out of a war, not out of a hot economy, and you can't raise rates on a barrel of oil. Friday, core inflation did come in hot. More than a third of the headline was gasoline. That's according to the Labor Department. So, his diagnosis got stronger.
01:33 His call got worse, but he did say something everyone else or I guess nobody really picked up. >> What the market might not be pricing is a disconnect between Bassant and Warsh. So, remember there's history between these guys. Warsh and Bassant both worked under Stan Druckenmiller and George Soros. And they know each other pretty well.
01:54 They're pretty close. In fact, speculation is that Bassant was one of the people that really put Warsh on the map to become the Fed governor. >> All right. So, the Treasury's buying its own debt to pull the long rates down. The Fed is about to push short rates up. Same week, opposite directions. He called that 8 days before it became the story.
02:13 And by Monday, the odds were climbing. >> I think that Kevin Warsh is a pretty decent guy. He's probably the best Federal Reserve chairman in my experience. But if he really thinks he can conduct a campaign of rate hikes, then he hasn't done the math. And it just cannot be afforded. There's no way to afford it right now.
02:39 With the debt this large, the leverage with the debt this large of any even minor increases in rates is tremendous and has a tremendous bottom line effect. So, we're already spending more on servicing the debt than on national defense. We're actually a hair's breadth away from exceeding the other entitlement programs.
03:06 And it's taking a record portion of the federal budget just to service the debt. >> 40 years in this business and he isn't saying that Warsh is wrong. He's saying the arithmetic doesn't allow it. Then he said this. >> In gold, every time that Warsh opens his mouth, gold takes a hit because the Western traders start to believe that Warsh can actually raise rates.
03:30 And yet gold pops right back because smart money comes back in. Some of it from China for other reasons perhaps, but smart money comes right back in and brings the price right back up. And the longer-term uptrend remains intact. >> All right. Now, watch Friday. And I guess this chart, gold dropped when the inflation number hit down to 4305. Then it ran about 100 bucks.
03:51 And he described that session 3 days before it happened. Now, 2 days later, Ron Paul, 91 years old, 20 years in Congress, he wrote the book called "End the Fed." Now, I asked him what happens if the Fed actually does what people like him have wanted for 40 years. >> But, yes, if I did what I think is right, hurriedly, it's chaos.
04:15 But, if you don't do this, and we have the big bust coming, that is going to be a lot worse time It'll be just as bad or worse. So, you're not picking between the two, because it's coming. I believe from my understanding that the debt and malinvestment for the cleansing that a system like this has to have is coming, and it has to be liquidated.
04:48 >> Now, his answer is there's no clean version of this. You act now, and it's chaos. You wait, and the reckoning is worse. Then, I asked who comes out of it all right. >> The wealthy, the trillionaires, the deeps in the deep state people, the people who decide who's in the Federal Reserve.
05:09 Yeah, I think they know what's coming. I think they're parked in a pretty good position. >> All right, now the other side, because three people agreeing isn't an argument. Kevin Warsh went to Jackson Hole on August 28th in similar condition. He said inflation wasn't slowing convincingly. He said the 2% target is firm and fixed.
05:28 He also said that financial conditions are not currently restrictive. Now, that's the Fed chairman telling you money is still too easy. He's also running a Fed that's been on hold through five straight meetings. In July, three officials dissented. They wanted a quarter point then. Then, Friday's number landed, and the market moved from roughly 70% to 88.
05:48 7% in a single morning according to that CME Fed Watch tool. So, this is the case for yes is simple. The chairman said he'd have to work to do if inflation didn't cool and it didn't cool. And there's three people on this program that said that the Fed cannot afford to raise rates. The chairman said a condition in August.
06:08 Friday that condition wasn't met. The market says 88.7% Wednesday. Of course, we're going to get the answer in the comments. One thing, do they hike? Yes or no? I read them. I'm Jeremy Szafron for all of us here. Thanks for watching Kiko News. >> [music]