It's interesting to me that the bond market is so complacent about this. They view inflation as a slain dragon. Inflation stays low because people in the past expected the fed to react aggressively to the slightest sign of inflation. Bond investors refuse to demand higher yields (i.e. by not buying treasuries) because they expect inflation is temporary.
Here's the thing. Does anyone think that today's fed stands ready to plunge the economy into a deep recession like the 1980's to kill inflation if it gets out of control? Anyone? I have no such faith.
Here's the thing. Does anyone think that today's fed stands ready to plunge the economy into a deep recession like the 1980's to kill inflation if it gets out of control? Anyone? I have no such faith.