Here is a very recent article from the Financial Times where they push the trial balloon out of the container and into the atmosphere tenderly suggesting that the almighty gods at central banks will raise their "inflation targets":
IMF Warns Central Banks of Uncomfortable Truth
This is precisely what we repeatedly projected would happen. First, let's take a step back. Folks - apologies for the hard truth . . . . . . but one must understand that the Fed WANTS inflation. It's math.
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YCC and QE - Fed WANTS Inflation
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Option 1: Epic, monumental deflationary collapse. The Fed's shareholders won't like this (oh, you didn't realize the Fed is a private entity with shareholders that get rich off your back?). This option deflates everything as the money is sucked out and drained. Do lenders of fiat get paid in full here? NO.
Option 2: The Fed attempts to "inflate away the debt" where they nudge along inflation (of course not telling you this is the case) so that they can hopefully raise the NOMINAL level of GDP ("see look, we grew the economy because we are awesome and amazing") and lower the NOMINAL level of the Debt/GDP ratio. This option NEEDS inflation. Everyone can get paid back, but don't go crying to the Fed when you see the purchasing power of the fiat you receive when paid in full. We see YCC and QE in some shape or form as the mechanism here ultimately.
No other options? Perhaps, but highly likely some virtue signaled version of the above. Just because they have a bunch of fancy degrees and are worshiped by CNBC does not mean these luminaries walk on water and can invent new math or ignore math.
What is this 2% inflation target anyways? Who knows for sure, probably the result of IMF/BIS and other holier than thou "academic work" that also is a flat, round number that "sounds about right".
Back to the FT article linked above - classic gaslighting and trial balloon tactics. The Fed can't get inflation down under 2% if measured with any level of credibility, but more importantly the reasons why this is such are structural and not entirely tied to the Fed. You think cancelling the Keystone Pipeline was helpful? Petroleum is an ENORMOUS part of the global economy - deal with it. Snap your fingers, take a selfie with AOC, and magically make the economy run on wind and solar???? That is hilarious. We won't even get into the mangled supply chains caused by the fake pandemic and Biden.
The Fed, as suggested by the IMF via the Financial Times, will need to adjust its official inflation target while the critters in DC manipulate and alter the metrics such as CPI and core PCE to help in this magic trick about to be attempted.
If only there were a lifeboat or raft of sorts available where one could already exchange fiat debt for something of value using deep and liquid markets. If only.
We may even approach deflation (using Powell's term "transitory" to describe it) along with the noted adjustments above followed by sustained inflation of hard assets but likely not emphasized as much within the cooked books of the new "inflation tools and data sets" they will unleash.
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