Inflation Inquiry

The Fed, the ECB, and the BoJ have collectively increased balance sheets by $8 trillion since Sars-Cov-2’s debut. Last recession, it took the same central banks eight years to accumulate that much. With such large reserves, higher rates due to rising inflation pose a risk. If rates rise due to an improving economy, taxes will also rise, good. Stagflation, (high inflation and low growth) though quite unlikely, would be dreadful.