tag:blogger.com,1999:blog-1527840491496268397.post50083823165340399..comments2024-03-08T11:20:30.095-07:00Comments on Credit Bubble Stocks: Thursday Night LinksUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1527840491496268397.post-71244703412177550702022-09-16T09:06:55.713-07:002022-09-16T09:06:55.713-07:00Now do govs' attempts to soften blow of inflat...Now do govs' attempts to soften blow of inflation.Allan Folzhttps://www.blogger.com/profile/06762674627739423845noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-79534530083305174682022-09-15T15:11:19.652-07:002022-09-15T15:11:19.652-07:00Above all, I can't emphasize enough that this ...<i><br />Above all, I can't emphasize enough that this inflation flare-up was not caused by a Fed policy error: it was caused by the federal government's attempt to soften the blow of Covid lockdowns with massive, deficit-financed transfer payments that inflated the money supply. That mistake ended over a year ago, and M2 money supply growth has since decelerated significantly. So the fundamental reason for our current inflation has long since begun to fade in importance.<br /><br />I've been saying for months now that inflation pressures have peaked, and I still think that's the case. But I've also said that inflation would remain uncomfortably high, probably through year-end, because of all the inflation "in the pipeline" which takes awhile to work through the economy. So we need to be patient.<br /><br />What this means is that the Fed is not going to have to tighten much more than it already has. A 75 bps hike at next week's FOMC meeting might be enough. That in turn implies that the market is overly-concerned about the downside risks to the economy.</i><br />http://scottgrannis.blogspot.com/2022/09/inflation-pressures-are-in-fact-cooling.htmlCPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.com