Theoretically, inflation results from an increasing amount of money chasing the same amount of goods. But, as long as supply can rise with demand, inflation sho

Theoretically, inflation results from an increasing amount of money chasing the same amount of goods. But, as long as supply can rise with demand, inflation should not occur. The Fed manages inflation. If it gets too high, they can decrease bond prices and raise interest rates. It’s actually hard for them to increase inflation, as they can’t increase government expenditures or give people money. Lowering rates doesn’t do much when rates are zero and banks aren’t lending.