RATE REDUCTION – 12/27/21

While the Fed has commenced tapering its purchases of MBS and Treasuries by $15 billion/Month, this will only very indirectly reduce inflation. It’s because inflation is being generated primarily by supply constraints, not easy money. The best solution would be to lessen regulations, even if only temporarily, that make production more costly. Tapering and eventual rate hikes will slow the economy, but global supply-chain issues are the real problem. (Source: Dr. Elliot Eisenberg, the Bowtie Economist).

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