The Flation Debate: A ‘Hawkish’ Update?

[claireokc]

Commentary The Federal Open Market Committee has just commenced its latest meeting to set monetary policy. Everyone, their dog, and even the fleas on those dogs expect the central bank to notably ratchet up their inflation-fighting efforts come May 4 around 2:00 p.m. ET. Specifically, this will come in the form of 1) a 50-basis point (half a percent) increase in benchmark short-term interest rates and 2) more color on just how quickly the Federal Reserve will begin selling assets from its uber-bloated balance sheet. On that latter, expectations are that the central bank will be net sellers of nearly $100 billion/month between mortgage securities and Treasury paper. All else being equal, this will be designed to further crimp lending (which, at least for home mortgages, finally has slowed abruptly, even if housing prices themselves in most places remain high) and take some of the inflationary steam out of the system. ...

Source: https://www.theepochtimes.com/the-flati ... 46189.html