April 06, 2024

The inflation outlooks. We are not going to impugn Mr. Powell’s motives, but the facts are the facts. We do not see the Fed taking the action needed to reduce the excess money supply and bring the inflation rate to the 2% target range. Mr. Powell recently announced that the Fed may begin tapering the QT program. A slowdown of the balance sheet reduction will result in a faster monetary base and M2 growth rates. Hence the QT tapering would increase the excess money supply and that would dampen the deceleration of the inflation rate. Keep an eye on M2. A positive M2 growth rate would signal a tapering of the inflation rate decline and in the worst case an inflation rate reversal.

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format