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KEY PRIVATE BANK ECONOMIC PERSPECTIVES:

Is the Economy Over Inflated?

Major global central banks have long inflation rate that as of January 2022 stood “Two years ago, the [Federal Reserve] felt
regarded a two percent inflation target as at seven percent. they had to do all they could to ensure
the guiding principle that drives economic that when we went into lockdown because
policy. That’s true far and wide, from Of all those factors, an inflation rate that of COVID the economy would stay face
the Bank of Japan to Sweden’s central hasn’t been seen since the early 1980s up,” explains Key Private Bank’s Chief
bank. And in the United States, former is key to why the Federal Reserve has Investment Officer George Mateyo. The
Federal Reserve Chair Ben Bernanke was signaled its plans for a series of interest tactic was stimulus. Interest rates were
so committed to a two percent inflation rate hikes beginning in the spring of lowered to zero while money was pumped
target, he enshrined it in official fed 2022. And those hikes are sure to have into the American monetary system. At
policy in 2012. But a decade later, we a distinct economic impact to both the same time the federal government
live in a world that Bernanke could have consumers and businesses that rely was also aggressively directing stimulus to
never predicted. In 2022, the economy on loans to help them purchase big- consumers to the tune of trillions of dollars.
is weathering a global pandemic that is ticket items like cars and furniture. But
becoming endemic, a military crisis in the how did we get here? And how should “So, all of this money showed up in bank
Ukraine, soaring fossil fuel prices and an businesses respond? accounts of people sitting at home with

“

The idea is to

take the punchbowl
away from the
party,” Mateyo

explains. And
the Federal
Reserve plans to

do just that with
a series of

interest rate hikes.

10 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • APRIL 2022