Fed Signals End to EZ Money

In this week’s general economy segment to round out the week, we’re talking about an article that’s been up for a few days from The Wall Street Journal. The Federal Reserve is now signaling that they’re eventually going to have to shift away from the EZ money pandemic policies. We’ve been a big fan of the easy money, but some of it’s been a bit on excessive side.

The discussion at the Fed meeting on Wednesday the 20th has been that they know it’s coming. They’re worried about inflation, although the bond market doesn’t seem to be worried about inflation. We do see a commodity inflation with the price of wood, and other commodities, even down to silicone chips. A lot of this is just directly due to the pandemic, and with, again, easy money policies, it’s made the demand for these commodities increase dramatically. We all know that people have been working on their homes or buying new homes due to the pandemic because it’s one of the only things you could do. That all takes lumber and tile and other types of commodities. A lot of the silicone chip factories had shut down. They’re just now getting back up to speed, and that’s put a demand on new cars, to the point that used cars are spiking. So prices are just going up.

These are good signs as people get back to work, in the rest of the country where things are being lifted. Be looking and be planning for money to cost more, loans to cost more, etc. The SBA and the government are planning to back off of easy money loans. We think it’s going to be around for the rest of this year, but hopefully you’re planning beyond this year.

If we can help you think through some of these things, we would love to do that. Give us a call, and have a great weekend!

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