The Fiscal Dominance's Inflation Impact- Best Strategy By Lynn Alden
In this video, Lyn Alden, founder of Lyn Alden Investment Strategy, breaks down the concept of fiscal dominance and its relationship to inflation + interest rates.
Alden says the Fed's ability to fight inflation is dampened because the source of inflation is fiscal, and explains why high government debt could drive higher rates to force higher inflation. As governments prioritize financing their expenditures through increased borrowing, central banks may be compelled to print more money to cover the deficit. This surge in money supply can lead to inflationary pressures, eroding purchasing power and destabilizing economies. Striking a balance between fiscal and monetary policies becomes crucial to curb the adverse effects of fiscal dominance on inflation.
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#Centralbanks
#interestrasing
#interestrates
#bank London
#federalreserve
#fed
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