Despite having read a lot about the Fed, I still get confused about how to interpret its balance sheet.
So please correct me, but my current understanding is it's actually pretty simple: when it goes up, it's creating "money." But hard to square what the effect on inflation is. Sure, inflation eventually occurred. But arguably nothing came of the massive increase post GFC for more than a decade.
Despite having read a lot about the Fed, I still get confused about how to interpret its balance sheet.
So please correct me, but my current understanding is it's actually pretty simple: when it goes up, it's creating "money." But hard to square what the effect on inflation is. Sure, inflation eventually occurred. But arguably nothing came of the massive increase post GFC for more than a decade.