Monetary policy is the setting of interest rates by the central bank. Fiscal policy is taxing and spending. Monetary policy has been more or less zero since the GFC.

BTW loose fiscal policy did not cause inflation.

Not really: inflation is happening all over the world, not just in the US. In fact, the US has some of the lowest inflation among western nations.

The cause of inflation is the economic hit from Covid and our response to it. So my original point stands: the world is complicated, and it's naive to say "Biden caused inflation."

Loose monetary policy is what enabled the US to respond to COVID in the manner it decided to. I don’t think you’re being charitable to the poster you’re replying to when you say “it’s complicated” then place much of the blame on the very factor said poster identified.

But the bulk of the response to COVID (what hackyhacky is arguing) did not happen under the current administration, so wouldn't be due to their policies (what TimTheTinker is arguing).

Monetary policy is the setting of interest rates by the central bank. Fiscal policy is taxing and spending. Monetary policy has been more or less zero since the GFC.

Don't lose the "Biden administration" context.

The majority of Covid debt originated prior to January 20th 2021, and with a GOP majority in the Senate. Of the $1400 stimulus sent to individuals, the previous President, the previous Senate Majority Leader, and the 2 Senate candidates each campaigned on the equivalent of the $1400. The previous administration is also on record as rejecting audit measures for the Payment Protection Program. The previous administration nominated the fed chairman that increased the federal reserve balance sheet and tools well beyond 2008-2009, while also not adjusting the pace despite the federal stimulus above (and other stimulus until Fall 2021)

> Loose monetary policy is what enabled the US to respond to COVID in the manner it decided to.

This still fails to explain why the US is seeing lower inflation than most of the rest of the world, almost none of which has the borrowing capacity of the US federal government.

The US is the world reserve currency, so in uncertain times investors in foreign countries buy dollars. This is the only reason why the US is not currently seeing inflation rates of 20 or 30% per year.

The rest of the world is not uniformly seeing inflation. I heard this morning that Canada is at 3.5%. Korea is at 6%, and this is driven by import prices, since the USD is at high demand.

Domestically to the US, it's more complicated. Boomers are retiring causing a labor crunch, but businesses are attaining record profits which just about match the magnitude of price increases.

From what I can tell, the US had the highest inflation in the G7 until the Fed started hiking interest rates more aggressively than the rest of the world to get it under control. This was particularly noticable to me since once they did the UK became the G7 member with the highest inflation and our media started pointing at that as proof of our government's economic incompetence in a way that the US media very obviously had not.

Yes - the Fed is (for better or worse) more independent and agile than the ECB. Being responsive to only a single nation’s government (even when you’re the global reserve currency) has its perks.