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Investor warns inflation may hit 9% if Fed prints

Investor warns inflation may hit 9% if Fed prints

GrafaGrafa2025/05/01 10:10
By:Mahathir Bayena

Veteran investor Clem Chambers has warned that U.S. inflation could surge back to 9% if the Federal Reserve restarts quantitative easing in response to economic pressure.

In an interview with Kitco News, Chambers, CEO of Online Blockchain, said that current supply chain risks, particularly those related to U.S.-China trade tensions, are being underestimated by markets and policymakers.

Citing U.S. dependence on Chinese materials for food packaging, Chambers noted that about 30% of such supplies could vanish if former President Donald Trump’s proposed tariffs return.

“You know, the little blue packets that you put your chicken wings on. If they don’t have them, you can’t have your chicken wings in the supermarket, can you?” he said, emphasising that shortages in key packaging items could drive grocery prices significantly higher.

Chambers argued that supply-chain disruption could add “four, five, or six or seven percent” to food inflation alone.

“The Fed is the fairy godmother of America … if things go pear-shaped, they will pull the lever of print,” he asserted, also pointing to monetary policy as a central risk.

According to Chambers, renewed liquidity injections from the Fed could drive inflation to 8% or 9%.

He highlighted increased demand for safe-haven assets, citing gold purchases by governments like Poland and China.

“Gold is for war. Bitcoin is for flight,” he said, projecting gold could reach $5,000 and potentially $10,000 per ounce in the event of deepening geopolitical tension.

On Bitcoin (CRYPTO:BTC), which is currently near $95,000, Chambers noted that the asset’s appeal lies in its portability during times of uncertainty, though he warned that it could fall to $60,000 if macro conditions stabilise or the Fed refrains from easing.

At present, he said about 92% of his holdings are in cash and precious metals.

He has also reduced exposure to Ethereum (CRYPTO:ETH), citing concerns that Wall Street’s growing influence may limit outsized crypto gains.

Chambers added that while blockchain remains promising, he will wait for regulatory clarity and a more stable economic outlook before making significant moves.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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