Fed QE really will cause inflation this time
It may soon be time to ask whether the US is in the foothills of an inflationary wage-price spiral, compounding the commodity price spiral that has been underway for several months.
One might equally ask whether it is tenable for the US Federal Reserve to keep purchasing $120bn of bonds each month after the output gap has already closed, and at a time when the federal government is running a post-pandemic “war economy” deficit of 13pc of GDP.
The current picture is nothing like the early phase of QE a decade ago when massive monetary expansion was required to offset the contraction of money caused by the banking crisis. Today US banks are again in rude good health and the transmission channels are working.
Ambrose Evans-Pritchard Telegraph 11 May 2021
https://www.telegraph.co.uk/business/2021/05/11/fed-qe-really-will-cause-inflation-time/
Kursutvecklingen fram till sommaren avgörs om börsoron även når räntemarknaden.
Om så sker är risken stor att den rekyl vi nu ser ändrar skepnad till en varaktig och mer rejäl börsnedgång.
Ulf Petersson DI 11 maj 2021
https://www.di.se/analys/da-blir-raset-pa-riktigt/
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