Inflation is deflating the American dream -- and it's about to get worse

Unfortunately, the worst is yet to come.

The Fed’s meager strategy for fighting inflation hasn’t included aggressively cutting its $8.6 trillion balance sheet. The balance sheet is only about 3.8 percent less than its record high in April 2022, after more than doubling during the pandemic.

This overprinting of money affects many markets, as those dollars aren’t evenly distributed across the economy, resulting in distorted price signals. The Federal reserve adding assets to its balance sheet (by buying Treasury debt, agency debt, and mortgage-backed securities) kept interest rates artificially low. Those markets are starting to correct, as mortgage rates have risen to 20-year highs of around 7 percent.

The Fed created the current inflationary situation (too much money), which was fueled by Congress’s deficit spending, and exacerbated by Biden’s overregulation (too few goods and services).

Now, the false “boom” is busting. Hardworking families and entrepreneurs bear the brunt.