"They're going to go back to QE," said Schiff.
QE, or quantitative easing, is a fiscal policy in which a central bank creates new money in order to buy government bonds and ultimately stimulate the economy – the Fed's way of addressing the 2007-09 financial crisis.
Schiff's reasoning: Rampant inflation in the United States is just around the corner, and it's going to soar faster than the interest rate increases by the Fed.
"Inflation is headed up not just on a producer level but on the consumer level, and inflation is going to be rising at a pace that is much faster than any rate hikes that we might get from the Fed. So real rates are going to be falling even if the Fed raises nominal rates," he said.
This inflation will cause the Fed to "raise interest rates as slowly as they can possibly get away with and at some point they're going to have to come up with an excuse why they're going to stop raising rates and why they're going to cut rates again and why they're going to go back to QE," said the investment broker.
Moreover, Schiff believes that this imminent surge in inflation may actually be the fault of the central bank…