The real limitation on the amount of losses the Federal Reserve can sustain is inflation: once cash flow imbalances force the Fed to effectively monetize its losses, at some point people stop expecting the Fed to maintain price stability and inflation expectations unanchor.

causalpending

Speaker

Peter Stella

Evidence Quote

Question is at what point do people believe Fed must inflate away its losses

Source

Debt Death Spirals, Fed's Losses, & Fiscal Theory Of Price Level | Peter Stella & Joseph WangForward Guidance
Created: 8/10/2026, 10:58:24 PM

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