Inflation is coming but everyone is anxious to know when.
The Federal Reserve pumped a lot of capital into the economy during the recent economic downturn in hopes of aiding bank lending and preventing bank failures.
The Fed increased its balance sheet from $850 billion to over $2 trillion. The financial world now is bracing for the backlash.
Saturating our financial market with such a large amount of extra capital has many dreading a dramatic period of inflation. The Fed now has to take actions that will curb these side effects while still maintaining the stabilization and recovery that our economy has achieved so far.
Puzzanghera, Jim “Bernanke says Federal Reserve will scale back stimulus policies….eventually” LA Times
Chan, Sewell “Bernanke’s How-to on Rate Increase Lacks a When” New York Times