The Fed has announced the tapering of quantitative easing, but it's a gentle tapering, so its balance sheet continues to expand. Supply chain imbalances remain but maybe they're starting to get worked out. Inflation does not seem to be abating and wages are rising, which is good for borrowers (households and governments) as the real value of their debt measured in units of labor shrinks, but difficult for investors (cry me a violin) and also rent payers -- as higher wages by and large fail to keep up with the prices of the lynchpin asset for Americans -- a home.
And yet, with all that cash out there, it's hard to figure out what to do with it. All assets are bid up, so people hold cash and sink it into low utility stores of value like NFTs and contemporary art.
Meanwhile there are all kinds of important policy goals that need addressing -- first and foremost climate change and wealth dispersion -- but a toxic political climate for establishing consensus and allocating public funds towards them. At least the private sector is trying to step into the vacuum with environmental, social and governance strategies, but they give rise to resentments and pushback of their own -- and are reasonably criticized as pissant greenwashing. Much better that calm and effective leadership should rise up in the public sector.
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