‘They’ll chicken out’: Fund legend Rick Rule says the Fed won’t keep hiking rate...

The Fed is raising interest rates aggressively in an attempt to tame raging inflation.

But according to legendary investor Rick Rule — former president and CEO of investment fund Sprott U.S. Holdings — things may not go as planned for America’s central bank.

“I think they’ll chicken out,” he told Stansberry Research earlier this month.

“If we had a period of real interest rates it would certainly cure inflation, but it wouldn't cure inflation until it did amazing damage to various balance sheets.”

This isn't the first time Rule has voiced concern about the economy’s ability to handle substantially higher interest rates.

In an interview with MoneyWise earlier this year, he said, “I do not believe that the broad equities market will handle multiple rate hikes.”

Rule doesn’t suggest bailing on stocks completely. Here’s a look at three things that the super investor still sees opportunities in 2022.

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Precious metals

Consumer prices are rising at their fastest pace in 40 years. While the Fed is tightening, Rule doesn’t believe the rate of inflation will slow anytime soon.

“I think we'll continue to see prices going up for most of the remainder of the decade,” he told MoneyWise.

To preserve your purchasing power, Rule points to gold and silver, which can’t be printed out of thin air like fiat money.

“I think that an investor who does not have some of his or her wealth in precious metals or precious metals equities are making an extraordinary mistake,” he cautions.

You can buy physical gold and silver at your local bullion shop. Or you can buy shares in companies that produce precious metals.

For investors who are getting started in the sector, Rule suggests looking at the big names first such as Barrick Gold (GOLD) and Wheaton Precious Metals (WPM).