Upward Pressure on Prices
To control price inflation the Fed must shrink the money supply or increase interest rates. The Fed is growing the money supply and working to lower short term rates - the opposite of what the doctor ordered. Therefore, prices are likely to move higher.
The fiscal year 2025 $2 Trillion deficit puts upward pressure on the money supply and price inflation as the Fed may have to step in and absorb some of the new Treasury issues that are coming to cover the deficit.
