Fed Signals Reduced Stimulus as Inflation Soars to 39-Year High

[mystery-ak]

Fed Signals Reduced Stimulus as Inflation Soars to 39-Year High
It has been pumping money into the economy.
by Joe Silverstein
January 18, 2022, 12:16 AM


Federal Reserve Chairman Jerome Powell admitted Tuesday before the Senate Committee on Banking, Housing, and Urban Affairs that inflation is “running very far above our target.”

“This year, in all likelihood, we’ll be normalizing policy,” he continued. “We’re going to end our asset purchases in March, we’ll be raising rates over the course of the year. At some point, perhaps this year, we will start to allow the balance sheet to run off.”

The Fed began purchasing $120 billion in bonds and mortgages per month at the onset of the COVID-19 pandemic, significantly increasing the money supply and contributing to inflation. Currently, the Fed holds $9 trillion in assets on its balance sheet, double the amount held in early 2020.

It has also pumped money into the housing market on a large scale, with one op-ed in The Hill noting, “One reason home prices have been increasing at nearly 20 percent per year is that the Federal Reserve has continued to buy up $15 billion worth of mortgage-backed bonds each month, keeping mortgage rates artificially low. The result has been a booming market, driving home prices, and now rents, higher.”

more
https://spectator.org/fed-signals-reduced-stimulus-as-inflation-soars-to-39-year-high/

[catfish1957]

Stimulus, raising interest rates, and more crazy (mostly green) draconian controls on this economy......

The freakin' trifecta of taking the $ and our economy down the path of the Weimar Republic.

Timing is going to be critical to when we see this runaway train break...........

[Hoodat]

“This year, in all likelihood, we’ll be normalizing policy,” he continued. “We’re going to end our asset purchases in March

Complete BS.  It would be wonderful if it were true, and would be the best possible action the Fed could take.  But they won't.  The Fed will continue financing government debt with newly issued money, negating the government's need to borrow already existing cash.  And the money supply will continue to expand.