The Federal Reserve, monitors price changes to ensure economic growth remains stable. The Feds leimotiv is maximum employment and price stability. If the Federal Reserve detects too much inflation or deflation, it uses monetary policy tools to control prices of good.
🏦 What's happening ?
Lately, the Fed's message has been that everything is under control and we should not expect any changes from their side. According to the U.S. Federal Reserve Chairman, the price spikes this spring could be due to post-pandemic supply shortages or a surge in demand as the economy rebounds, but nothing that would warrant a monetary policy response.
Expected price spike?
While they continues to claim that price jump are expected during the spring, evidence of a serious jump (a.k.a inflation) is pilling up...
🚀 Commodity prices
Prices of major commodities are at their highest level in more than 5 years...
💸 Fed balance as 36% of GDP
Fed Balance sheet goes to the moon 🌓.
US Real estate market all-time high 📈
S&P 500, fastest recovery 🏎️
I am not an economist but data do not look really nice... well it seems that the Fed knows what they are doing, after all their main goal is to 'maintains price stability'. Let's wait and see 😬.