Stimulus Leads To Inflation
Inflation in fact was already showing a modest upside bias in recent months before the coronavirus exploded into a full blown global crisis based on one year changes in core and headline.
Stimulus leads to inflation. With the federal reserve and the federal government providing massive stimulus to the economy in the face of the covid 19 crisis a persistent worry among investors is whether these policies will lead to inflation down the road. Many expected that stimulus to create a surge in inflation. Once the crisis is over how will all the excess money that is being pumped into the economy be absorbed.
While core domestic sensitive inflation over the last 20 years has averaged 2 7 and above 3 thus far in 2020 core commodities inflation ex food and energy has averaged 0 0. Where is all the stimulus cash coming from.