You may remember hearing horror stories, a decade or so ago, about how poor monetary policy in Zimbabwe sent prices for consumer goods skyrocketing to absurd levels. For example, at one point the price of a loaf of bread exceeded $500 million (yes, really). Granted, those are Zimbabwean dollars – but it’s still just as bad as it sounds.
That is one very dramatic example of how much influence governments can exert over their nations’ economies. Right now, as lockdown measures lift and economic recovery ramps up, the threat of excessive inflation is on many people’s minds. And the government’s response to it – specifically that of the Federal Reserve (or just “the Fed”) – has come under scrutiny.