The monopoly sovereign currency issuer, in this case the US Congress[1], absolutely has upward pricing power for prices denominated in the currency it issues. B

The monopoly sovereign currency issuer, in this case the US Congress[1], absolutely has upward pricing power for prices denominated in the currency it issues. By upward I mean they can set prices in anything as high as they like, but not necessarily as low as they like. Imagine if Congress passed a First Time Homebuyer act that would allow any first time buyer to have the government write a check on their behalf for up to a million dollars. All of the marginally desirable housing stock would instantly be priced up to a million dollars. Using loans instead of outright spending money into existence adds hysteresis, but the transmission mechanism remains intact. Edit: Incidentally that's why I oppose every proposed form of Universal Basic Income I've heard of. I like the idea of creating a demand backstop[2], but really it's just going to cause rents to increase by the amount of the subsidy. [1] Both the Federal Reserve and the Department of the Treasury are creatures of Congress and use delegated authority. [2] Well, I like it in an economy with strong productivity. If production can't stay ahead of the increased demand, you'll just get inflation until the UBI is more or less cancelled out in inflation adjusted terms.