If nothing extraordinary happens, the Federal Reserve will raise interest rates and implement “quantitative tightening”, that is to withdraw liquidity from the market, in its fight against the high inflation rate. The question is if Fed’s measures will be enough to push back inflation to normal levels? According to a blogpost from analysts Bitmex Research, Fed’s actions will have a significant impact, leading to temporary lower inflation rates.
“Inflation has now reached the highest levels since the early 1980s and the Fed will and must tighten liquidity conditions in response. Despite what some think, we believe this inevitable tightening of liquidity conditions will have a significant impact on consumer prices and the inflation rate will decline,” the post reads.
In the long run, though, inflation will “emerge as the final victor” and the period in between will see volatile inflationary conditions. This inflation volatility could be very difficult to navigate for inve
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