Fighting inflation

For the past 15 years the Fed has held interest rates at one percent or lower. During this time the Fed conducted a policy of quantitative easing which means buying assets like bonds to put money into the economy. This was attempt to hold up the economy and prevent a slide into a recession. This continued to add to the money supply which has grown from one trillion in 2008 to 21 trillion today having increased 5 trillion just the last year. Now with all of these dollars chasing too few goods the result is inflation. To get inflation under control, the President called on companies to lower their costs and not their wages. He asked the car and tech industries to bring their supply chains back home and make both vehicles and semiconductors on US soil.“Instead of relying on foreign supply chains, let’s make it in America,” he said. Companies are always trying to lower cost but encouraging them to bring home manufacturing is a good start. Add to that expanding fossil fuel production will help lower transportation cost which will lower the cost of all items including gasoline. Stop the Fed from buying bonds and start selling bonds to reduce the money supply. Encourage more people to join the work force. The labor participation rate at 62.2% is still below the pre-pandemic 63.4%. Millions are coming back to work but still leaving millions on the sideline. This is important because productivity fights inflation.