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The Federal Reserve Has a Money Supply Problem

It is encouraging that the Fed is beginning to appreciate the downsides of its high-interest rate policy. However, it may be doing too little too late.

There was some good news and some bad news coming out of yesterday’s Federal Reserve interest rate-setting policy meeting.

The good news is that the Fed now seems to have grasped that the economy is slowing and that inflation is on a decidedly downward path.

The bad news is that the Fed has yet to recognize the importance of the unusual money supply contraction now taking place and the severe risks that its hawkish policy stance is posing to the financial system.

This makes it all too…

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