They always tell us that monetary policy works with a lag. Who am I to argue. They’re the experts. Sure seems to apply to inflation.
However, economists and central bankers suffer selective memory loss.
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” – Milton Friedman
The purple line is total Fed system credit. The other lines are various measures of inflation. CPI updated as of December 10 for November. Other inflation measures are October data, most recent available. Fed Assets are as of December 8.
They say it will only hurt for a little while.
