With extraordinary government spending and out-of-hand budgetary deficits. It is only a matter of time before we see frightful inflation. It may take two or three years to really show up, and it may happen by the next presidential term, but it will come.
The Federal Reserve’s primary job is not to protect against systemic financial risk, as is being proposed by the Obama administration. It’s primarily to maintain the value of the currency.
Since 1978 the Fed has to help enforce the Full Employment and Balanced Growth Act, also known as Humphrey-Hawkins. That conflicts with the Fed’s prime stated activity. That’s because the Act’s enforcement creates an inflating bias, not one of dollar stability.
So there is always a conflict of interest being overlooked by financial media comment.
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