"FED will counter that effect" Of course not. Since the original statement was about holding gobs of money on a balance sheet, it is clear that regardless of

"FED will counter that effect" Of course not. Since the original statement was about holding gobs of money on a balance sheet, it is clear that regardless of what the FED does, you would increase inflation by spending that money rather than keeping it on the balance sheet. Therefore, holding that money reduces inflation(since the other option was to spend that money and increase inflation).