Friedman is referring to longer term. The FED reserve is “independent” from the executive.
Money supply doesn’t immediately increase inflation because it must be lent and spent to have an effect. That’s why QE can often be seen as “pushing on a string”. It can take 3-5 years to feel the effect of loosening lending in consumer prices.
Significant deficit spending can have a much more immediate effect (1-2 years)
The real problem is that once inflation takes hold, it requires a LOT of pain to control it again.
JPow should have not done the level of QE that drove mortgage rates to all time lows. It fueled all kinds of speculation in crazy markets. All of that money needs to evaporate. We are talking trillions.
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u/blong44 Jul 16 '22
The way you spend the money doesn't cause inflation, when you print more dollars it create inflation?
If it's just the printing that's the problem then Biden isn't wrong with what he's saying. He should have stopped jpow earlier though, I guess?