J.P. Morgan Asset Management ‘Global Fixed Income Views’ – Q2 2021
Inflation has moved to the front of the queue of potential risks. Milton Friedman famously said that “inflation is always and everywhere a monetary phenomenon.” Well, we certainly have an overabundance of money. Further, this crisis features MMT as the appropriate policy response, whereas the global financial crisis (GFC) response focused on austerity.
The risk is that persistently rising inflation becomes a great challenge for the central banks and the Fed’s long-term federal funds policy rate projection, the dot plot, has to migrate from…