On Wednesday, the US Treasury yield curve slightly steepened, with the 10-year Treasury yield rising 1.73 basis points to 1.660%, and the two-year Treasury yield falling 0.99 basis points to 0.400%.

The yield on the 10-year US treasury bond bond rose to 1.64% on Tuesday, a level never reached since mid May. People expect that the long-term inflation rate may rise to over 2%, and some believe that the yield may rise to over 1.7%.

Hedge fund managers stated that the risk lies in the loss of confidence in the Federal Reserve's policies in the capital markets and the formation of a perception that the Federal Reserve is "lagging behind the curve" in responding to sustained inflation.

In the past year, despite the frenzy of printing money, Federal Reserve Chairman Powell has consistently claimed that:

High inflation is temporary, and even if there is indeed high inflation in the future, the Federal Reserve has methods and means to deal with and solve it.

Since the Federal Reserve believes that "inflation is temporary," the vast majority of fund managers in the market are highly consistent with the Federal Reserve. Just three months ago, in a survey of global fund managers conducted by Bank of America, over 60% of fund managers chose to believe in the Federal Reserve and believe that inflation is temporary.

In the eyes of legendary Wall Street traders, the Federal Reserve is the creator of inflation, not the antagonist to inflation. He even bluntly said, "I am worried about the future of the United States. Obviously, we may have the most inappropriate monetary policy I have ever seen. We are increasing stimulus, we are still quantitative easing, and what we should do is the opposite. We naturally underestimate inflation

He pointed directly to the period of high inflation in the 1970s: "Central bank officials ignored the lessons of history." Currently, the Federal Reserve is confident and continues to impose its own will on the market, pushing the stock market higher. The Federal Reserve risks disrupting the entire global financial system based on the US dollar. The inflation genie has come out of the bottle.

If we don't turn to attacking it, we could go back to the 1970s, when inflation was the most important issue for several presidents and Federal Reserve chairmen.

In the latest released minutes of the Federal Reserve's September interest rate meeting, the Fed as a whole is no longer hiding its ears and giving up the "temporary" nonsense, but acknowledges that inflation may continue to rise:

The risks surrounding inflation forecasts tend to be upward, and there is a high possibility of more serious and sustained supply issues. Long term inflation expectations may significantly increase, leading to sustained inflation increases

Of course, the Federal Reserve has something to say, saying that the reason for the sustained rise in inflation is due to "serious and ongoing supply issues" that have driven "significant increases in long-term inflation expectations", which is absolutely unrelated to the Fed's crazy printing of money.

In this situation, everyone couldn't help but ask seriously:

Can the Federal Reserve control inflation?

Yes!

In recent decades, the Federal Reserve's approach to manipulating global inflation has been simple:

Once it is discovered that the inflation rate has suddenly risen and is in a climbing stage, it is necessary to find ways to reduce the growth rate of circulating currency;

If you find that the inflation rate has decreased to 1% or even lower, boldly print money to increase the growth rate of circulating currency.

The Federal Reserve has been doing this for the past few decades!

Moreover, based on monthly data, the Federal Reserve's response time to inflation by controlling the CiC growth rate usually does not exceed three months.

For decades, the Federal Reserve has been playing a game of catch and release with inflation - because the circulating US dollar (CiC) represents the amount of dollars that society can use to purchase actual goods and services. Therefore, using the growth rate of the circulating US dollar to control and manipulate official inflation data (all real goods and services, excluding asset prices) can be said to be handy, and every hit is a hit.

So, can the Federal Reserve control inflation now?

Unfortunately, having the ability to control inflation is one thing, and being willing to control inflation is another matter.

In fact, every time the Federal Reserve is determined to control the growth rate of CiC, or even reduce it to a negative level, there is no doubt that US dollar inflation can be controlled. However, unfortunately, if the inflation rate of CiC is strictly controlled, it will inevitably bring negative consequences:

The US economic growth is in a quagmire.

This is the 'negative impact' of controlling inflation.

When inflation is high, real economic growth in the United States may not necessarily be good;

But when inflation is low, real economic growth in the United States is definitely not good!

You may say, it doesn't matter if the economy grows slower!

The relationship between the growth rate of the US dollar in circulation and the unemployment rate in the United States can help you understand the pressure the Federal Reserve will face if it tries to reduce the CiC growth rate.

Over the past 40 years, with the exception of 1996 and 2010, every round of CiC growth rate that has reached its peak (below 5% or below) will almost always bring about a large-scale increase in unemployment rate. If CiC growth rate continues to maintain a high level, then the overall unemployment rate can continue to decrease

That's the problem here——

Do the Federal Reserve have the courage to do so in order to lower inflation levels, cause the unemployment rate of the American people to skyrocket, make it difficult for the US government to move forward and cut off financial opportunities, such as killing parents?

In today's environment, governments with high debt are the ones most eager to create inflation!

The US government is the leader in actively promoting global inflation!

Someone has said that in 1981 and 1984, in order to control inflation, Volcker forcefully lowered the CiC growth rate against the intentions of the US Carter administration, thereby reducing inflation?

At that time, the double-digit inflation in the United States was the core issue of the US economy and also the most dissatisfied area for most Americans. In contrast, economic growth was slightly affected, and the public could accept it - in short, although Volcker did not comply with the Carter administration at that time, at least he complied with the wishes of the majority of Americans!

Can you imagine that the current Powell would rather risk being fired, neither following the wishes of the people nor the government, with all his heart and soul, in order to control inflation and strive to reduce the growth rate of CiC?!

So, does the Federal Reserve have the ability to control inflation?

Of course there is!

As long as the growth rate of CiC is forcibly reduced to below 0, inflation will be controlled in a few months.

Unfortunately, the Federal Reserve has no intention or possibility of doing so.

Objectively speaking, each of us adults has the ability to kill, but if there is no survival pressure, who is willing to risk being shot and do such things?

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