Cut back on spending

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Politicians will still push trillion-dollar spending bills and the White House will still push for student loan forgiveness. Those actions will be very inflationary because it’s clear that no one seems to understand the source of inflation. 


But the Fed is going in a very different direction. 

If Washington wants to get inflation under control, there are pretty simple policy mechanisms. Politicians can (GASP!) cut spending or even raise taxes. But neither of those mechanisms are popular.

Or… they can INCREASE the supply of energy, food, semiconductors, and other goods through intelligent policy. But that’s too complicated and requires real work.

So the only answer is the blunt hammer of monetary policy –  rate hikes, balance sheet reductions, and more speeches than you can shake a stick at.

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