Fed Chair, Jerome Powell finally admitted today, at least, implicitly, there is too much stimulus demand (in the macro context) in the global economy and the Fed will have to accelerate its tapering.
The following charts clearly illustrate the U.S. economy is overheating and is a major contributing factor to inflation. Nominal retail sales and core capital good shipments remain 15 percent above and years ahead of their pre-COVID trend. Think of the trend line as the supply curve.
In hindsight, it is easy to say the global policymakers overshot with their stimulus, but it is certainly better than the alternative and a deep recession/depression. Just as you and I, policymakers have to make decisions with imperfect information. Counterfactuals don’t go a long way in