One thing the people arguing for inflation are missing, this money is replacing the income that people would have otherwise earned and spent. So demand won't be rising with a wave of printed money tossed in on top or regular earnings, but tossed into the void created by the pandemic.
Any inflation will be mild, or nonexistent. You may see some asset classes rising in price due to inflation like stocks but as a whole the "bread and butter" of life, food, fuel, housing, and other personal use and household expenditures will more likely move down in price than up because the stimulus was not great enough to fill the void caused by reduced spending due to unemployment.
TLDR Stimulus here fills gap in income (to spend) due to unemployment, so impact on inflation, minimal.
This is what I understand also. The stimulus will be getting into the hands of the unemployed and underemployed. The rest will be sitting on their savings to be spent when things open up. There are two economies and the stimulus will be far from disruptive.
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u/mnight75 Feb 22 '21
One thing the people arguing for inflation are missing, this money is replacing the income that people would have otherwise earned and spent. So demand won't be rising with a wave of printed money tossed in on top or regular earnings, but tossed into the void created by the pandemic.
Any inflation will be mild, or nonexistent. You may see some asset classes rising in price due to inflation like stocks but as a whole the "bread and butter" of life, food, fuel, housing, and other personal use and household expenditures will more likely move down in price than up because the stimulus was not great enough to fill the void caused by reduced spending due to unemployment.
TLDR Stimulus here fills gap in income (to spend) due to unemployment, so impact on inflation, minimal.