Fed Chair Jerome Powell says money printing doesn’t lead to inflation

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In his statement with Congress on Wednesday, Federal Get Chairman Jerome Powell claimed that traditionally, changes in the money supply level have not impacted degrees in inflation.

In action to a concerns positioned by Congressman Warren Davidson about whether "M2 [cash supply] rising by 25% in one year" is going to "decrease the value of the U.S. buck," Powell responded, "there was a time when financial plan aggregates was necessary components of rising cost of living which has actually not been the case for a very long time."

Powell included that "the relationship in between various accumulations [like] M2 and rising cost of living is just very, really reduced, as well as you see that currently where inflation goes to 1.4% for this year. Rising cost of living dynamics develop gradually, but they do not tend to change overnight."

When asked about his views on rising cost of living overall, Powell commented that "we do anticipate inflation to go up both because of base effects … as well as additionally due to the fact that we could have a surge in costs as the economic situation re-opens, we do not anticipate that to be a consistent, longer-term pressure, so while you might see rates move up, that's a different thing from consistent, high inflation, which we do not expect. If we do obtain it, we have the devices to deal with it."

Do you concur with Chairman Powell's views? Create your action in the comment section down below.

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