I agree that they have not lowered rates. However as the chart shows they did dramatically increase the Fed’s balance sheet in the past two weeks. They did this

I agree that they have not lowered rates. However as the chart shows they did dramatically increase the Fed’s balance sheet in the past two weeks. They did this in order to facilitate loans to banks who have underwater assets on a mark to market basis. It would be one thing if they were lending to banks based on the current market value of the assets, but instead they are letting the banks pretend the assets are worth what they would be if held to maturity. So both the Fed and the banks are playing pretend. We can argue about whether or not this is inflationary. I suppose it would depend on what these funds are used for. It certainly isn’t as inflationary as if the Fed had simply given this money to consumers to spend. However, I do think it is an error to ignore such a swift reversal of quantitative tightening over the past couple years.