Vital Signs: War of Words on Fed Policy, InflationJames C. Cooper
With all the monetary fuel sloshing around in the economy, investors have every right to be concerned about future inflation—and some Federal Reserve policymakers share their worries. After all, excess reserves in the banking system, which determine the economy’s money-creating potential, now stand at close $1 trillion, up from a comparatively trivial $2 billion or less prior to the financial crisis. Waiting too late to drain those funds from the system could unleash their potential to generate inflation.
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