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Might seem counterintuitive, but does anyone else see this as a positive sign? In that, we have been going for about 15 years injecting liquidity into the econo
by bladegash 5y ago
Might seem counterintuitive, but does anyone else see this as a positive sign? In that, we have been going for about 15 years injecting liquidity into the economy with little to no increase in inflation. That was counterintuitive to most economic assumptions and is something Japan struggled with for some time with quantitive easing, to the point of deflation at times. If nothing else, the Fed and economic theories have tools to counter inflation, which in my mind, isn’t completely bad news.
- giantg2 5y agoIt would seem a good time to start unwinding the $9T or whatever in treasury held securities so that we'll be ready to keep inflation at 2% for the next deflationary trend.
- Nbox9 5y agoIt’s potentially bad because the market isn’t as simple as “keep inflation at 2%”. We also want GDP growth and low unemployment. The tools we have to decrease inflation can hurt both of those metrics. This means our position is risky, and the treatment to reduce inflation might have strong consequences.
- bladegash 5y agoThat’s fair, but we were also running out of tools to increase liquidity/inflation as well. Not many tools to increase inflation to a healthy number when interest rates are already at or approaching 0% and billions of dollars are being created out of air.