Our co-founder Arthur Laffer notes that the Fed has increased its balance sheet (thus pouring money into the economy) to the tune of $400 billion in the weeks since the Silicon Valley Bank failure. This has offset much of the quantitative tightening (QT) that had begun at the Fed over the last year. We’re sure that Jerome Powell says this intervention is “transitory.”

This is hardly the way to get back to the Fed target of 2 percent inflation.

Here is the Fed’s balance sheet in 2023:

And here is a look back to the start of QT: