If one believes the financial analysts of various Wall Street banks—which have been made very fat with Fed food during the past lean year—the American economy is roaring through the first quarter and is going to grow by 8 or 9%. The Fed itself, which one would think could also see such wonders happening, has nonetheless re-spiked its punch bowl by adding $500 billion to its printed bank reserves in January and February. It has even restarted buying mortgage-backed securities from the banks, at $25 billion or so a week. Meanwhile Biden and his Treasury Secretary Janet Yellen insist the economy and American people are in deep crisis — BUT, there will be full employment by the end of the year if only the $1.9 trillion relief bill is passed!
But the Fed is reacting to the very real combined threat of inflation and rising long-term interest rates — which its own money-printing, and $2.6 trillion going on $4.5 trillion of Treasury “relief” borrowing, has created. The inflation is not only in food and housing. The Associated General Contractors of America (AGC) wrote a press release on Feb. 17 in which it said warned the Biden administration of recent increases in materials prices. The AGC said the cost of materials such as lumber and steel have reached “record-setting levels” and contractors face long delivery times for materials. “A government index that measures the selling price for materials and services used in new nonresidential construction increased 2.5% from December to January and 10.7% since April,” said the release. https://www.agc.org/news/2021/02/17/soaring-prices-and-delivery-delays-lumber-steel-and-other-inputs-squeeze-finances
