- I have explained many times that central banks worry that falling inflation (disinflation) and outright deflation reduce the incentive for spending and capital flow into financial markets.
- The US Fed has gobbled up just over 24% of the outstanding TIPS market in 2021.
- Taking the bait, commodities and corporate securities have spiked higher with inflation expectations, as individuals and trend-following funds have ratcheted up risky holdings in the hopes of outrunning capital shortfalls.
For further details see:
Central Banks Trying Every Trick To Boost Inflation