This misunderstanding gets a lot of people upset. Printing money creates inflationary pressure, yes, but there are a lot of _deflationary_ pressures right now, so if they get it right, things will balance. It also creates moral hazard, though (despite what many people believe) the fed is only buying bonds that were investment grade until just before the fed starting intervening in the system — it will also be buying junk bonds etfs (probably hyg and jnk), but these are better described as high-yield corporate bonds. This more serves to protect the liquidity of ongoing concerns ability to raise debt (necessary for the economic machine to keep running) than it does to put money in the pocket of greedy people (it will — at best — maintain the value of those bonds, and more likely soften the blow.)
Disclaimer: recently sold my JNK holdings after fed’s announcement today.
Prediction: we will end up with full Japanification and/or MMT.
> there are a lot of _deflationary_ pressures right now, so if they get it right, things will balance
Inflation and deflation are not so one-dimensional that they can simply "balance out". When the Fed issues money that money isn't distributed to everyone equally. And when money gets removed from the economy, that doesn't affect everyone equally either—nor does it impact the same people to whom new money is being distributed. Even if the total money in circulation stays the same, there's still a massive redistribution of wealth going on behind the scenes.
Disclaimer: recently sold my JNK holdings after fed’s announcement today.
Prediction: we will end up with full Japanification and/or MMT.