They said that any government stimulus would delay the necessary economic readjustment and sow the seeds of the next recession. He had argued that the Great Depression was due solely to the Fed’s mistake in allowing the money supply to shrink by a third, which created deflation. It increases the money supply and leads to economic expansion – and inflation, eventually. Conversely, when the Fed sells securities from its portfolio the money supply shrinks and inflationary pressure diminishes. The chairman of the Fed, Republican Jay Powell, appointed by Donald Trump, is pumping up the money supply with his foot all the way down on the accelerator.

Source: The Guardian March 28, 2020 10:01 UTC