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Message
re: Why this is Trump’s economy?
Posted on 8/15/18 at 10:41 am to BurningHeart
Posted on 8/15/18 at 10:41 am to BurningHeart
quote:
It's almost certain inflation will pickup over the next year or so and the Fed will have to keep raising rates to keep it in check.
Eventually this will cause a recession, and I just hope this doesn't happen before a midterm or presidential election.
Not necessarily.
Go research Quantitative Tightening.
The Fed has been letting 10-year QE bonds mature without renewing, as well as MBS's.
Nearly $30 billion is falling off the Fed balance sheet every month at this moment, and that number is going up.
We've gone from owing the Fed around $4.5 trillion to now owing around $4.2 in just 11 months of QT.
This is helping keep the interest rate hikes slow and steady.
This is also another reason why inflation-adjusted GDP growth of 4.1% is so outstanding.
Inflation only went up 14.3% over Obama's 8 years. Just imagine how much worse his inflation-adjusted GDP growth would have been if they hadn't forcibly held inflation down while they doubled the M2 money supply with $4.5T of QE and another $900B of "stimulus".
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