Inflation Is To Be Expected
•February 25, 2026
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Why It Matters
Recognizing inflation as a possible policy instrument reshapes expectations about future Fed actions, influencing investment strategies, borrowing costs, and corporate planning.
Key Takeaways
- •Fed allegedly prefers sustained high inflation to keep rates elevated.
- •Supply‑chain disruptions are presented as primary driver of current inflation.
- •Past QE failed to generate desired inflation despite massive balance‑sheet expansion.
- •Author cites credible threat theory and Williams’ 2018 speech as proof.
- •Breaking production, like housing, may limit policy options for recovery.
Summary
The video argues that the current bout of elevated inflation is not accidental but a deliberate outcome of Federal Reserve policy. It claims the central bank has been seeking persistently high inflation and inflation expectations so it can maintain the federal funds rate above zero, using supply‑chain disruptions as a tool.
The presenter traces the Fed’s post‑2008 trajectory: rates at the zero lower bound, massive quantitative easing that expanded the balance sheet from $850 billion to over $4.5 trillion, yet failed to lift inflation to the 2 % target. According to the speaker, only when the supply chain was “severed” by pandemic lockdowns, stimulus checks, tariffs and geopolitical shocks did price pressures rise, fulfilling the Fed’s “credible threat” agenda.
He cites John Williams’s 2018 speech on a low‑neutral‑rate world and Jerome Powell’s August 2020 remarks that “too low” inflation poses a risk to the economy, interpreting them as evidence that policymakers deliberately engineered a higher‑inflation environment. The video also references a “credible threat theory” hosted on a UEE University site, urging viewers to review the original speeches.
If the supply‑chain break remains a policy lever, inflation and interest rates could stay elevated longer than markets expect, pressuring corporate margins, consumer purchasing power, and debt servicing costs. Investors and businesses would need to factor a potentially prolonged high‑rate environment into budgeting, pricing, and capital‑allocation decisions.
Original Description
When you know they wanted it, it is no surprise when they get it.
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