You were writing this stuff in April of 2015. You could not have been aware that the fed would start a long series of 25 basis points hikes by December (I believe) of 2015. And as I think I said would eventually happen. The Fed would finally begin to first stop growing its balance sheet and then begin to reduce it. But of course no one could have predicted what would happen in China in 2019 which became known in the Western Democracies by at least December of 2019.
Generally speaking the Fed doesn't cause inflation. Its mandate is to prevent it. Although everyone thinks that printing money causes inflation, in the U.S. it hardly ever does. This is because the Congress's printing of Money, which the Fed facilitates on behalf of Congress, is nowadays followed by taking that newly printed money back out of the economy, to the penny, via subsequent Treasury Security Auctions. That newly printed money doesn't stick around, it's absorbed into Treasuries (Treasuries are not a part of the money supply!). The Feds job is to gradually convert some of those Treasuries back into the transactional form of money via bank reserve accounts; thus maintaining enough money supply to facilitate commerce without deflation, but also without undue inflation. I was critical of the Fed because I thought it had been too slow to recognize what the effect on inflation of the Covid fiscal measures would be. When Covid hit, the Fed quickly reversed course, halted its already embarked upon series of interest rate hikes and begin easing. The Fed continued to ease during the pandemic even after it was clear that the Congress was embarking on a massive fiscal rescue package. A better policy, at least in retrospect, would have been to pause or to reduce the pace of interest reduction to compensate for Congress's actions.. This is really my only criticism of the Fed during that period and it is because they seemed not to anticipate what the effect of the the massive fiscal measures coming down the pike would be. Nevertheless, the bulk of the post Covid inflation was caused by Covid-related externalities that the Fed could do virtually nothing about.
Business cycles typically last around two decades unless something major interrupts them. Fed observers must therefore be very patient. This works against our natural inclination to be impatient.
well, you have two things here that in the U.S. are not usually related, though we see constant attempts to relate them. "Printing" itself does not lead to expanded money supply as you and most others here think -- indeed as nearly all Americans think. (I have explained why over and over, but it falls on deaf ears of course, this being a forum for traders ; not economists.) And tightening is the typical response to inflation --- not to money printing. Inflation, as Uncle Milty said, is caused by too much money chasing too few goods and services, which is exactly the same thing as saying, " too few goods and services available for the amount of money available." But inflation is generally not related to "printing". Inflation can be caused, among other causes, by rapid changes in the economy that leaves too much money in the economy until the Fed can side track some of the excess money, or Congress can drain some of the excess. Or it can be caused by a decrease in supply in the face of a sudden increase in demand. In any case, in the U.S., the cause is not usually money printing. Just because two thing appear to happen at more less the same time, i.e., correlation, does not prove cause.
Did you forget about QE (aka money printing)?
Its called (by The FED itself) Quantitative Easing for a reason.
