With Fed' recent actions to provide more liquidity, isn't there a risk that this in itself could be pushing up inflation? What are you thoughts on this?
Related, most probably have seen the recent big spike in the Fed's balance sheet. Powell said this is only "temporary" but what to make of this in context of inflation?
Here's link to Fed's balance sheet. If you set graph to 1Y you can clearly see the recent spike: https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
Personally I think Fed will have to keep hiking to really get inflation under control. I'm also not conviced that banks will massively tighten their credit conditions.
Next week we will have new PCE inflation data which probably will make the narrative more hawkish again. I feel the doves are abusing the screw ups of managers at some local banks to justify that Fed should go more easy on inflation.
Wall Street doesn't care about inflation but for middle class Americans this remains a heavy tax that keeps going up.
Submitted March 23, 2023 at 03:54AM by ThinkBigger01 https://ift.tt/imXc8fe
