The Federal Reserve today announced that it will be reducing the amount of quantitative tightening in June. My question is, isn't this counterproductive to the Fed's goal of lowering inflation?
I could be wrong but I was under the impression that the Fed would be looking to lower M2 money supply in order to bring inflation back closer to its 2% target. Or is the Fed's balance sheet not directly correlated to the amount of M2? Maybe I'm just focusing too much on the theory that Covid relief caused M2 to explode and that's why it is so hard to bring inflation down (because there is just too much money in the economy).
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