We are all aware of inflation raging through the economy, now the highest in three decades. Supply chain bottlenecks, shortages of key items, and surging consumer demand have been contributing factors. In response, the Federal Reserve System (Fed) has begun to taper its purchases of bonds in the open market by billion per month until they reach zero. This is expected to occur in June 2022. To understand the Fed’s move, we need to return to the beginning of the coronavirus pandemic. The economy was in freefall. Unemployment rose precipitously, and GDP turned negative. To help stimulate the economy,...

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